The pressure to solve the Arab-Israeli conflict through an international conference -- which most Israelis regard as a mere prelude to gang rape -- has eased. What Israel has wanted, bilateral negotiations, now seem far more probable.
* Saudi Arabia and a revived Kuwait owe their existence to the United States and the coalition it created. Washington's leverage will be greatly strengthened.
* The decision of Palestine Liberation Organization chief Yasser Arafat to align himself with Saddam Hussein has forced the U.S. to discard the notion that he must be the spokesman for Palestinians in any future negotiations with Israel.
* Saudi Arabia and Egypt have both acknowledged Israel's right to retaliate for the missile assault from Iraq. While this is a small concession for Saudi Arabia, it is historic in the sense that the right to defend oneself implies the right to exist.
* In his recent congressional testimony, Secretary of State James Baker suggested that Arab states should now be more willing to negotiate directly with Israel.
* The German foreign minister, Hans-Dietrich Genscher, after talks in Damascus, claimed that Syria conceded Israel's right to exist -- although a subsequent Syrian statement alleged that nothing has changed.
If negotiations commence, who would speak for the Palestinians? Mr. Arafat, who has finally belied the efforts of the U.S. State Department to sanitize him as the proper spokesman, is now clearly out of the picture. Washington's disillusionment with the PLO chairman is shared by his former paymasters, Saudi Arabia and Kuwait.
What about King Hussein of Jordan? It is well known that he lives in fear of his Palestinian majority who, in the 1970 "Black September" revolt, almost succeeded in deposing him. His tilt toward Saddam Hussein and the Iraqi cause was unquestionably a result of this fear. He wouldn't take the West Bank if it were offered to him; he has all the Palestinians he can handle within his own current borders.
It is in Saudi Arabia and a potentially reconstituted Kuwait, bitter over the losses they have incurred from Iraq (whose war against Iran they financed), that Israel may find an altered state of mind. Riyadh's interest is in stability, and this means preservation of the monarchy. Kuwait wants a restoration of the vanquished state. Stability between Israel and the Palestinians is likely to contribute to both goals. The potential for a series of fruitful bilateral negotiations is better than at any time since the Jewish state was founded in 1948.
Israel's first priority would be a commitment to its right to exist. Such a commitment would remove the threat of a Palestinian staging ground. But obviously there must be the quid pro quo of an acceptable Palestinian settlement.
What can Israel offer? It can never offer entirely what the Palestinians want -- a completely independent state that includes portions of Jerusalem. What it can offer is a West Bank and Gaza state with home rule, except for military security and public order. This is the so-called Autonomy Plan, originally authored by Menachem Begin.
The plan calls for the abolition of the military government in Judea, Samaria and Gaza. In its place would be administrative autonomy with full suffrage and a secret ballot. The inhabitants would have the right to choose either Israeli or Jordanian citizenship. Any citizen could be elected to the Israeli Knesset or the Jordanian Parliament.
In any plan, Jerusalem is a sticking point. It is Israel's "eternal capital," but a holy place to Muslims as well as Christians and Jews. Neither ultra-orthodox Jews nor Muslim fundamentalists are ready to compromise on its control. In fact, however, the Temple Mount, site of the Dome of the Rock and the Al Aqsa mosques, is now administered by Muslim clerics. A solution to satisfy extremists on both sides would be to cede control of the Temple Mount to Saudi Arabia (which has no border dispute with Israel) to parallel its control of Mecca and Medina, the other holiest sites of Islam.
The United States, savior of Kuwait and Saudi Arabia, has influence and leverage it did not have before. The possibilities for solving one of the world's most intransigent problems have never been greater.
Mr. Blumberg and Mr. Owens are co-authors of a book on Israeli intelligence, "The Survival Factor."