NEWS ANALYSIS Hopes of renewed peace talks after Israeli-Palestinian meeting

JERUSALEM, June 9 (JTA) — It may have been one of the most positive periods in a long time for the Middle East. Or, it may have been just another interval of false hopes, of movement without progress, of deepening deadlock. On the face of it, three events — a meeting between Israeli and Palestinian negotiators, disclosure of an Israeli plan for a permanent settlement and the election of a new Labor Party leader — all gave encouragement this week to the optimists. At the same time, the pessimists continued to find evidence to support their doubts that any breakthroughs were imminent. The Israeli-Palestinian peace process showed a first glimmer of life this week, with a meeting of officials from the two sides under Egyptian auspices in Cairo. The message after Sunday”s three-hour session was that there would be more meetings — which was the best that could have been expected after so long a lapse in high-level direct talks. The talks broke off in mid-March after Israel began building Jewish housing at Har Homa in Jerusalem, in an area that Palestinians envision as part of their future capital. After Prime Minister Benjamin Netanyahu and Egyptian President Hosni Mubarak met last month, Mubarak”s adviser, Osama Al-Baz, shuttled between Netanyahu and Palestinian Authority leader Yasser Arafat, conveying various proposals for renewing the talks. Indeed, officials from both sides said they had agreed to attend Sunday”s meeting in deference to the Egyptian initiative. But given the deep feelings over Har Homa, it was not surprising that a last-minute crisis almost threatened to cancel the meeting. Israeli officials said they would not attend after a spokesman for Arafat, Marwan Kanafani, said that Israel had agreed to stop all settlement construction as a precondition to the Cairo talks. The Israeli delegation delayed its departure to Cairo until the Palestinian delegation issued a statement saying that there had been a misunderstanding regarding Kanafani”s remarks and that there had been no agreement regarding Israeli construction projects. But Har Homa remains at the heart of the peace process impasse. The Israeli daily Ha”aretz reported Monday that the two sides were considering a compromise under which Israel would “significantly slow the pace of building on Har Homa, to a virtual halt.”” Diplomatic sources were quoted by the paper as saying that the face-saving proposal would enable Netanyahu to maintain that building was continuing, while the Palestinians could declare that the slow down was equivalent to a halt. While Netanyahu denied that he had agreed to stop the project, reporters noted that construction work at Har Homa had dropped off in recent days. A few days before the Cairo meeting, Netanyahu”s proposals for the permanent status talks with the Palestinians were leaked to the Israeli press — and only weakly denied by government officials after they were published. The proposals called for Israel to keep control of about half of the West Bank. But they also envisioned ceding the other half to the Palestinians — which represented a major departure from the Likud Party”s traditional “Greater Israel”” ideology. At the same time as the proposals were leaked — and, according to some pundits, not coincidentally — the opposition Labor Party elected former Israel Defense Force chief of staff Ehud Barak as its new leader. Barak is a centrist figure whose military credentials and pragmatic policy ideas will, Labor hopes, win back middle-of-the-road voters who preferred Netanyahu over former Prime Minister Shimon Peres in the May 1996 elections. Although Barak has opposed a national unity government in the past, his own relative hawkishness and Netanyahu”s newfound moderation could yet forge the basis for a unity government, say the pundits. These developments provide the foundation for the optimistic interpretation that bold new moves are afoot after several tension-filled months of crisis. Many analysts here suggest that what is important in the long term are not the specifics of Netanyahu”s plan for the final-status talks, but rather the break with past dogma that it represents. The plan reportedly even entertains the notion of Israel abandoning certain far-flung settlements on the West Bank. This would be a dramatic departure from Likud”s long-held principles. Also important is the fact that the Netanyahu coalition appears to have endured this first flight of the trial balloon with remarkable stability. It is as though the mainstream of the coalition, like the mainstream of the opposition, has come to terms with the need to strike a territorial compromise with the Palestinians. What remains to be decided is the amount of land to be relinquished. This perspective gives support to renewed speculation that now that Barak is installed as Peres” successor, Netanyahu”s thoughts will turn again to a unity government. The premier insists that he is serious about seeking accelerated negotiations for a permanent settlement with the Palestinians. He knows, moreover, that only a successful negotiation and an agreement widely supported in Israel can virtually guarantee him a second term in office. Arafat has responded to the reports of Netanyahu”s final-status proposals by saying that the Palestinians expect to recover no less than 91 percent of the West Bank. But for the optimists, this seems to indicate that, despite the gulf that opened up during the past three months, the two sides may soon engage in earnest negotiations. Just the same, this week”s developments have also served as fuel for Israeli pessimists. They see Netanyahu”s leaked plan for the final-status talks as a deliberate ploy to curry favor at home and abroad with an ostensibly reasonable opening offer — one that the premier can be certain will be rejected outright by the Palestinian side. Netanyahu, according to this interpretation, remains committed to taking the peace process no further in substantive terms. His purported plan is a mere exercise in public relations, the pessimists say, designed to elicit more months of treading water, while building at Har Homa and settlement projects in the West Bank continue. This, of course, is the gloss put on the plan by Palestinian spokesmen. Nevertheless, behind the scenes, there are Palestinians who recognize the significance of a Likud leader offering to withdraw from half of the West Bank. The pessimists, meanwhile, see the gap between Likud and Labor as vast and not bridgeable. Under its new and ambitious leader, they say, Labor will become a fighting opposition — as it has conspicuously failed to be during Netanyahu”s first year in office. They point out that while Barak himself is thought of as a centrist, the party as a whole recently solidified its dovish positions, resolving at its national conference to remove from its platform opposition to a sovereign Palestinian state. The pessimists expect the Egyptian effort to put the talks back on track will fizzle out within weeks, leaving an enhanced danger of new disillusionment and frustration.