WASHINGTON, Jan. 13 — Aaron David Miller remembers with painful clarity the moment he despaired of helping Israelis and Palestinians achieve the peaceful settlement toward which he spent most of his career working. It came during a call on his cell phone last March. A senior adviser for Arab-Israeli negotiations in the State Department, Miller was celebrating Passover in Israel, at the home of an aide to Prime Minister Sharon. A staffer from the American embassy in Tel Aviv called to report that Palestinian terrorists had carried out a suicide attack on Israelis sitting down to a Seder at Netanya´s Park Hotel. Twenty-nine Israelis were dead, 140 wounded. Miller realized at once, he said, that the massacre had done more than derail the mission that had brought him to the Middle East with President Bush´s special envoy, retired Marine Corps General Anthony Zinni. "I felt as if I was in the movie ´The Perfect Storm,´" Miller told the Forward in an interview last week. "A person who is about to be completely washed away by gigantic waves. I felt that the situation was out of control and that our capacity to influence it was minuscule. I felt real despair that night." The last two years were filled with such moments of frustration and despair, Miller said, to the extent that "everything I have tried to do and everything that I have tried to work for, certainly over the course of the past 12 years, is now at risk." A 25-year State Department veteran, Miller has served since the first Bush administration as part of a specialized team devoted to advancing Middle East peace negotiations. Now, at age 53 and six years short of retirement, Miller is leaving the diplomatic service to become president of a not-for-profit organization, Seeds for Peace, which runs summer camps and other programs bringing together Jewish and Arab teenagers. Known to wags as "the peace processors," the team he belonged to was led until 2001 by Dennis Ross, who began the project during the Reagan administration and held the rank of assistant secretary of state. It included at various times the current American ambassador to Israel, Daniel Kurtzer, and former ambassador Martin Indyk, among others. Often controversial because of its single-minded dedication to advancing Israeli-Arab reconciliation, the team was dismantled, and its members scattered, when the current President Bush took office in 2001. Miller, however, stayed on, serving as an adviser on Israeli-Arab issues. "The past two years have demonstrated to me with the most frightening clarity," Miller said, "that what is equally important to finding the right diplomatic fixes to problems such as Jerusalem and borders and security and refugees is to work actively on what I believe is one of the missing ingredients [of Israeli-Arab relations], which is to create the psychological foundation among the publics to support the agreements" that their leaders may reach. Miller has not utterly lost hope. He still believes an Israeli-Palestinian peace agreement can and will be reached. He also believes strongly in an active American role in advancing such a settlement. But he now believes the violence and enmity of the last two years have "extended the time horizon" for achieving a settlement. For now, he said, "I am afraid that Arabs and Israelis would no longer believe in the power of negotiations and dialogue and discourse to resolve their problem." In retrospect, Miller faults himself and his peace team colleagues for not realizing earlier, before the outbreak of the intifada in September 2000, that Israelis and Palestinians were not ready to make quick progress toward a "final status" resolution of their conflict. "They were not ready to go from zero to 60, metaphorically speaking, in such a short time," he said. In the summer of 2000, when the Clinton administration tried to broker a comprehensive deal between then-prime minister Ehud Barak and Yasser Arafat, a foundation of trust between the parties was missing, he said, at both the leadership and popular levels on both sides. That, Miller said, was a major lesson he has learned from his experience as an advisor on Israeli-Arab negotiations. "We may have underestimated just how nasty a conflict this is — just how entrenched the suspicions between the parties actually were, and how complicated it would be to tackle permanent status issues when in fact the suspicion and mistrust have not been overcome, and when the situation on the ground was as nasty as it was." Some activists outside government wished he would have come to that realization years ago. Miller and his fellow peace-processors were often faulted, particularly by Israeli hawks and their American Jewish allies, for a naive faith in the ability of negotiations to reconcile the unreconcilable. Some saw that faith as leading the peace team into a murky area of equating two sides that were fundamentally unequal. Miller was occasionally attacked by activists as harboring a "bias" against Israel. At times the criticisms got personal and nasty. Arab pundits regularly pointed to the Jewish backgrounds of peace team members — notably Miller, Ross, Indyk and Kurtzer — as evidence that they and the administrations they represented were hopelessly biased in favor of Israel. Israeli rightists, on the other hand, periodically accused the American Jewish diplomats of tilting toward the Arab side in order to avoid accusations of dual loyalty. Aides to former prime minister Yitzhak Shamir privately spoke of them as "self-hating Jews," and one referred once to Miller and his fellow peace processors as "yehudonim," a derogatory Hebrew term roughly equivalent to "kikes." Last year Miller was heckled by Zionist Organization of America members while giving a lecture in New York. Miller acknowledges that he´s received a fair amount of hate mail over the years, from Jews and Arabs alike. But he insists the criticisms were unreasonable and silly. "Frankly, I have never understood what all the shouting was about," he said. "I hear the criticism when I go to the region, I hear it every day, but it´s not honest criticism," said Miller, who first went to work for the State Department as a historian in 1977, shortly after receiving a Ph.D. in American diplomatic history and Middle Eastern history from the University of Michigan. "It isn´t honest because most people in the Middle East do know that in America, people are hired as civil servants not because of their ethnicity but because of their skills." Still, his ethnic identity runs deep. A Cleveland native, he was reared in a Conservative Jewish household as a member, on his mother´s side, of the Ratner clan, one of the wealthiest and most active families in Cleveland´s famously close-knit Jewish community. He has kept up his private Jewish involvement over the years, maintaining synagogue membership and sending his children to Jewish day schools. Miller insists, however, that his ethnic background has not colored his foreign-policy judgment one way or the other. "People believe that you are the sum-total of who they think you are," he said, "and because you are someone who is Jewish or an American, you are somehow blocked from understanding the sensibilities and sensitivities of the others, let alone being fair and balanced in your work. And frankly, I have never felt that way. I believe that I have gone to extreme lengths to understand both the needs and sensitivities of all sides to this conflict and that is about the best I can do." If and when peace negotiations are resumed, Miller said, they cannot be based on a "balance or imbalance of power," but must be based on "a balance of interest." The Israeli-Palestinian conflict, he said, is a classical example of one that is based on a power imbalance. The Palestinians are wielding the "power of the weak," mainly by waging terrorism or acquiescing to terrorism, while the Israelis are wielding the "power of the strong," creating facts on the ground. A condition to successful negotiations, Miller said, is a clear Palestinian agreement that their "armed struggle," as they refer to their campaign of anti-Israel violence, has to stop. "I see no way — under any conceivable or imaginable circumstance — of creating any kind of environment for negotiations, without that fundamental realization being grasped by Palestinians and executed," he said. As a precondition to that, the Palestinian Authority must "regain the monopoly" over the forces of violence in the West Bank and Gaza. Contrary to the dominant opinion in Israel´s government, which is shared by much of the Bush administration, Miller does not believe that the current Palestinian leadership is irrelevant, nor does he rule out the possibility of it regaining that monopoly and serving as a negotiating partner. "The problem goes deeper than the current leadership," he said. "And it´s not up to us to determine who will lead the Palestinian people." The current leadership, he said, has the three commodities that a Palestinian leadership must have in order to effectively exert its authority internally: political legitimacy, money and guns. "I don´t see on the horizon an alternative leadership that has more of those commodities right now," he said. Miller confirmed what other senior administration officials said, mostly anonymously and off the record: that the crisis with Iraq will "have to be resolved before a serious focus or emphasis can be placed on Israeli-Arab peacemaking." Would the Bush administration push for a major Israeli-Palestinian peace-making initiative following the resolution of the Iraqi crisis? It is simply too early to tell, Miller said. He does believe, however, that the administration can launch such an initiative simultaneously with its planned campaign to democratize the Arab world. "We are capable of doing both," he said. Miller said that since the creation of Seeds for Peace in 1993, he has gone every year to visit its summer camp in Maine, to "recharge the batteries" by witnessing how Israeli and Palestinian teenagers find the courage within themselves to "overcome their personal inhibitions, and to merge the narratives." His first involvement in Seeds for Peace was through the organization´s founder and president, the late John Wallach, who died last July. Wallach, an author and journalist, was a friend and neighbor of Miller´s. Miller´s wife Lindsey later became vice president of the organization. Miller´s daughter, Jennifer, was one of the first teenagers to join the camp, and remained active in the organization. Today, a 22-year-old college graduate, she is working on a book that will draw on the experience. Although Seeds for Peace touches a relatively small number of children every year — approximately 2,000 Israelis, Arabs and Americans have attended its summer camp during the last nine years — Miller says it cannot be judged only by quantitative criteria. The organization is trying to create leaders, he said, people who will be influential in promoting an environment of negotiations and coexistence. "The next generation is crucial," Miller said. "You lose these youngsters and their commitment to negotiating their way to progress, rather then using terror and violence, and the whole thing is lost."