JERUSALEM, Nov. 3 (JTA) — It´s not every day that an Israeli army chief of staff calls in top journalists to express deep misgivings about government policy. So when Lt. Gen. Moshe Ya´alon initiated a late October briefing to warn that the government´s handling of Palestinian terrorism could provoke more intense Palestinian violence, the country sat up and took notice. At bottom, Ya´alon´s critique reflected a deep divide between two schools of thought: the hard-liners, like Defense Minister Shaul Mofaz, who believe relentless military pressure can force the Palestinians to abandon terrorism for peace negotiations; and relative moderates, like Ya´alon and many of the Israel Defense Force´s top generals, who maintain that Palestinian violence will only abate when serious political incentives are put on the table. Ya´alon´s concern about the lack of a political horizon mirrors growing public criticism of government policy and decreasing confidence in Prime Minister Ariel Sharon´s capacity to deliver the peace and security he promised when first elected nearly three years ago. The domestic criticism of Sharon has not gone unnoticed in Washington, where some powerful voices are urging pressure on Israel to move the Palestinian track forward and help deflect Arab anger at the American role in Iraq. By going public, Ya´alon highlighted Israel´s profound security dilemma and deep differences in the security establishment over how to deal with it. All the top brass agree that tight closures, blockades and roadblocks in and around Palestinian population centers make it harder for suicide bombers and other terrorists to get through. At the same time, though, Ya´alon and others argue that the longer Palestinians are cooped up without minimal public services, the easier it is for terrorist groups to tap into feelings of humiliation and hopelessness to recruit future bombers. In other words, they say, it may make good sense in the short term to clamp down to stop the next bomber, but in the long run the tight closures could produce dozens more terrorists. These differences came to a head in late October, when Sharon convened a high-level meeting to discuss the unprecedentedly tight noose Israel had imposed on the Palestinians in the wake of an Oct. 4 suicide bombing that killed 21 people in a Haifa restaurant. Ya´alon warned of a pressure cooker in the Palestinian territories that was likely to explode and urged that restrictions on the movement of people and goods among West Bank towns and villages be eased. The director of the Shin Bet security service, Avi Dichter — who sees his organization as primarily responsible for stopping the bombings — objected. Any lifting of closures or roadblocks could enable suicide bombers to get through to their targets, he argued. Mofaz backed Dichter, but agreed to some minor easing of restrictions. Convinced that the government was about to make a major blunder with potentially far-reaching military ramifications, Ya´alon decided to go public. He incurred sharp criticism from the government, primarily for making political comments while still in uniform. Ya´alon´s supporters said distinctions between the military and political domains are not so clear-cut — and that, as Israel´s No. 1 soldier, Ya´alon was duty-bound to warn the public about what he sees as a potential deterioration in the military situation. Ya´alon did not leave it there, however. He implied that because of its hard line, the government had missed a great opportunity to take the peace process forward during Mahmoud Abbas´ brief tenure as Palestinian Authority prime minister, and was likely to do so again with Abbas´ successor, Ahmed Qurei. Moreover, Ya´alon complained, every time there might be a chance to move forward, the government seemed to order another targeted assassination of a terrorist kingpin. Government spokesmen vehemently deny the charges. Mofaz claims he is doing all he can to ease conditions for Palestinian civilians but says ongoing terrorism makes it impossible for him to go as far as he would like. Moreover, he says, he did all he could to help Abbas — including an agreement to transfer four more cities to Palestinian control — a plan that was torpedoed by an eruption of Palestinian terrorism. As for Qurei, Mofaz says he is willing to work with him, but progress will depend on just how far Qurei is prepared to go in cracking down on terrorism, as the Palestinians agreed to do under the "road map" peace plan. For his part, Sharon expects to hold a key working session with Qurei soon. But his own political position is not as strong as it was when Abbas was prime minister. Sharon´s position has not been helped by the police investigation into corruption allegations concerning him and his two sons. On Oct. 30, Sharon was interrogated for six hours on the so-called "Greek Island Affair," in which he is suspected of taking bribes to help Likud activist and millionaire contractor David Appel secure a Greek island for tourist development. Police afterward were divided on whether they had enough evidence to press charges. But even if Sharon is not indicted, his political star seems to be in decline. Sharon´s weakness may be one reason for emerging signs of a U.S. rethinking of the Israeli-Palestinian equation. In an Oct. 30 address at Georgetown University, the influential U.S. deputy defense secretary, Paul Wolfowitz, drew a clear link between hostility to the United States in the Arab world and failure to make progress on the Israeli-Palestinian track. Wolfowitz also expressed support for a joint grass-roots peace initiative authored by former Shin Bet chief Ami Ayalon and Sari Nusseibeh, president of Al-Quds University, implying that sometimes leaders need to be goaded along by public sentiment. In yet another sign of changing American attitudes, the U.S. Bureau of Intelligence and Research is recommending that the Bush administration apply pressure on Israel to stop construction in settlements in order to make headway with the Palestinians — and, the thinking goes, thereby help calm the situation in Iraq. The recommendation comes in a paper written by Carl Ford, assistant secretary of state for intelligence and research, which was submitted last week to the Senate´s Select Committee on Intelligence. Ford´s position is said to reflect that of CIA Director George Tenet. Coupled with the changes of nuance in Washington, Ya´alon´s critique could herald the beginnings of new domestic and international pressure on Sharon to move on the Palestinian track. As usual, though, the key lies with Washington — and it´s hard to say what the president might do in an election year. Leslie Susser is the diplomatic correspondent for the Jerusalem Report.