NEWS ANALYSIS Netanyahu may make compromises to invigorate Mideast peace efforts

JERUSALEM, April 15 (JTA) — After four weeks of crisis in Israeli- Palestinian relations, Prime Minister Benjamin Netanyahu appears ready to offer some confidence-building measures to revive the peace process. Netanyahu”s new conciliatory stance apparently extends to Har Homa, the new Jewish housing project in southeastern Jerusalem that has prompted almost daily Palestinian demonstrations in the West Bank for the past month. The attempt at conciliation also includes the three further Israeli redeployments called for in the Hebron agreement signed in January. The scope of the first redeployment — much like the Har Homa issue – – angered the Palestinian Authority, which balked at accepting what they considered a paltry turnover of West Bank land. That redeployment has yet to be implemented. Netanyahu”s new positions were reported this week as he prepared for an important round of talks with U.S. envoy Dennis Ross, who was scheduled to travel to the region in an effort to coax Israel and the Palestinians back to the bargaining table. Ross” visit will be the subject of keen interest in Washington:
U.S. Secretary of State Madeleine Albright indicated this week that the outcome of Ross” mission would determine the course of American policy in the ongoing crisis. Netanyahu”s crisis-control efforts may necessitate a decision on his part to seek a national unity government, but this route is fraught with difficulties. Although the Labor Party”s veteran leader, Shimon Peres, remains firmly in favor of the idea, much of the Labor leadership is opposed to joining, preferring to wait for a possible fall of the Netanyahu government. Netanyahu”s new conciliatory posture covers two broad fronts: * Har Homa: In conversations with Italian officials over the weekend, the prime minister said that while land clearing has begun, the actual construction of Jewish housing may not start until the year 2000 — by which time the final-status talks with the Palestinians would be completed. Netanyahu also has proposed building Palestinian housing in Jerusalem, possibly on a hill across from Har Homa. He is said to be anxious to dispel an impression in Washington and in European capitals that this idea is merely a public relations stunt. * Further redeployments: Last month, the Palestinian Authority rejected the Netanyahu government”s decision to withdraw from 9 percent of the rural West Bank. Netanyahu and his aides accused the Palestinians of harboring unrealistic expectations. Now, Netanyahu is proposing a more generous transfer during the second redeployment, which is scheduled for September. The premier discussed this idea during meetings with key coalition figures, who then briefed members of the Knesset”s so-called “Greater Israel Lobby”” — a group of 17 hawkish parliamentarians, most of them coalition members. Netanyahu reportedly said that he could not proceed with the current coalition into the second redeployment, given the strong “rejectionist front”” element, as he is said to have dubbed the hard-liners. The premier”s insinuation, as members of the Greater Israel Lobby themselves admit, was that unless the coalition now rallies around a generous second redeployment, Netanyahu will have no option but to create a unity government to further the peace process. Netanyahu indicated in a series of interviews last weekend that a decision on trying to form a unity government is time-sensitive. Labor is due to hold its leadership election June 3, after which Peres will step down from the party leadership. This factor is clearly important to the premier because the two main contenders for the Labor leadership, Ehud Barak and Yossi Beilin, are strongly opposed to the unity option. Netanyahu is aware that the return of Peres, an architect of the Israeli- Palestinian accords, to the Cabinet could give the languishing peace process as well as the premier”s own stature abroad a much needed boost. But he is equally aware of the problems a unity government could create. The creation of a unity government would likely prompt the departure of the National Religious Party. Some political observers believe that it would cause a rupture within the Likud itself, because some Likud ministers would presumably have to move aside to make way for Labor to join the government. In the meantime, as Netanyahu ponders his domestic options, the threat of a large-scale explosion of Palestinian violence remains ever-present. Israeli officials say the Palestinian Authority is still balking at a return to regular security cooperation. The Palestinians, for their part, say they will not act as an agent for Israel, suppressing their own hard-liners while the peace process is in tatters because of what they see as Israeli intransigence. Still, despite this dangerous standoff, cooperation between the two sides on the ground has been fairly good, according to Israeli sources. These sources say the Palestinian Authority is straining to keep the ongoing street demonstrations under control and to keep the daily incidents of stone-throwing from becoming wholesale violence throughout the territories. So far, six Palestinians have been killed and several hundred wounded in clashes with the Israel Defense Force during the four weeks of tensions, which have been at their most violent in the West Bank town of Hebron. Observers on both sides point to the extreme fragility and volatility of the situation — even when compared to the intifada, the 1987-1993 Palestinian uprising. At that time, although the violence was more intense and widespread, the risk of full-fledged armed conflict was much lower. The Palestinians had no armed force of their own, their political leadership was in exile and Israeli security forces could deploy at will throughout the territories. But all that has changed. The Palestinian Authority now commands thousands of people, and there can be no assurance that some of them will not link up with rejectionist elements in the event of a total collapse of the peace process. Moreover, Palestinian Authority leader Yasser Arafat and his lieutenants are in Gaza and the major West Bank cities, which have all been transferred to exclusive Palestinian jurisdiction. Indeed, in response to an ill-considered remark by Defense Minister Yitzhak Mordechai last week that the IDF could easily reoccupy all the West Bank cities, a senior Palestinian official observed that the Israelis could easily get into the cities, but they would have greater difficulty getting out. This changed reality on the ground means, according to many observers, that Netanyahu cannot run the risk of an open-ended crisis. An act of terrorism, or even a major altercation on the West Bank between Palestinians and Israeli soldiers, could quickly ignite a tragic conflagration. The erosion of confidence between the two sides has been so deep that there is no way of knowing whether the conciliatory steps planned by Netanyahu, or any undertakings by Arafat to contain terror, can restore even the modicum of trust needed to resume negotiations.