What Good Is Peace If the Price Is Self-Annihilation? : Israel: Settlements are its only leverage for obtaining a fair and trustworthy deal with the Arabs.

RAMAT GAN, Israel —  The Bush Administration is convinced that the Arabs are finally ready for negotiation and compromise to achieve peace in the Middle East and that the Israelis have an obsession with history that is self-defeating.

Indeed, there have been major changes within the Arab world, in large part in response to American policy. Egypt did sign a peace treaty with Israel, and has honored the letter, if not always the spirit, of its commitments. Hafez Assad joined the “civilized world” in the anti-Iraq alliance, and is leading Syria into a new relationship with Washington. Even Yitzhak Shamir has indicated that Israel would welcome direct negotiations with Syria. And if Syria, or any other potential participant, demands that Israel first halt settlement activity--well, to President Bush and his secretary of state, these are minor and reasonable conditions, and Israel should be eager to grab at the chance for ending the wars and terror.

The Israeli government, accurately reflecting the views of the majority of the population, is not convinced. After decades of hatred, there is a strong suspicion that talk of peace is designed to weaken Israel and force a return to the narrow and highly vulnerable pre-1967 boundaries.

Israelis watch television broadcasts from Amman and Damascus, and they can read newspapers published by Palestinians, as well as those of Syria, Egypt, Iran, Saudi Arabia, etc. These sources do not provide evidence for an end to hostility and racism toward Jews and Israel. The Arabs still refuse to acknowledge the real causes of the 1967 War, or their responsibility for decades of terrorism. Lately, they have threatened, as they did in the 1930s and 1940s, to use violence to halt the immigration of the Jewish refugees to Israel, which would negate the fundamental purpose of Zionism. The enthusiasm that Saddam Hussein elicited among millions of Arabs and Muslims during the Gulf War reinforced these fears. While talking about peace to external audiences, at home, the Arab leaders still reject the legitimacy of the Jewish state. In reality, nothing has changed. Syria even refuses to participate in the regional water conference in Turkey if Israel is invited.

In this framework, settlements are not a minor symbolic concern but the core of the dispute and the key to the future. Many Israelis fear that if settlement activity is frozen before direct negotiations even start, the process will ultimately force Israeli withdrawal to the pre-1967 borders, with nothing to show for it. This tactic was successful following the two earlier wars, when Israeli troops withdrew from occupied territories under U.S. and U.N. pressure. In both cases, the Arab pledges to sign a peace treaty following Israeli withdrawal were simply ignored and preparations for the next round of belligerence began.

From the Israeli perspective, the territories are the only source of leverage with which to extract the changes necessary for an end to the threat over the long term. If that leverage were neutralized before negotiations even began, there would be nothing left to force the Arabs to accept the compromises required for an end to this bitter ethno-religious conflict. In the end, Israel would have neither land nor peace.

These differences of perspective between Washington and Jerusalem are entirely legitimate, and it would be a tragic mistake if the volume of the debate obscured either viewpoint. The Shamir government has been particularly inept in explaining its views, and by highlighting the issue of settlements in a manner that the United States could not ignore, has acted emotionally. Similarly, the angry tone and the threats directed by President Bush at Israel, and his government’s inability to address Israeli concerns and fears directly and substantively, are also counterproductive.

The major question is not when or even whether Israel will get loan guarantees for the absorption of Russian immigrants, or whether settlement activity will be halted, but whether this deep and bitter conflict can really ever be ended.

Israel would gain much more than the United States from peace in the Middle East. Israel also has much more to lose if this vision of peace is just an American illusion. The Israeli people will have to be persuaded that there is a real opportunity, and will not be bullied into making concessions and compromises that their own experiences tell them are dangerous or suicidal.