WASHINGTON -- A Labor-led government in Israel and an "even-handed" Bush administration present Arabs with as ideal a political dynamic as they could hope for in the Middle East peace process, analysts and diplomats agreed yesterday.
The United States will likely take full advantage of this situation between now and the U.S. elections in November to lock in significant progress, if not an actual agreement between Israel and Palestinians on autonomy in the occupied territories.
"I would hope that we could see the next round of bilateral discussions taking place just as soon as it is conveniently possible in the aftermath of the formation of a new Israeli government," Secretary of State James A. Baker III said yesterday in his first comment on the Israeli elections.
Mr. Baker and other officials diplomatically bypassed the opportunity to draw public satisfaction from an electoral verdict that bolstered their approach.
But the secretary did note that "the election results in Israel were considerably more decisive than many people had predicted."
White House discussions have begun on a meeting between President Bush and the likely Israeli prime minister, Yitzhak Rabin, aimed at putting the two nations' tense and ragged relations on a new footing, although no plans have been made or invitations sent.
Since the peace process was formally launched in Madrid last November, it has foundered on the fundamental obstacle of the two sides' inability to talk to each other about the principle of yielding territory in exchange for guarantees of peace.
The result has been what one diplomat calls a "dialogue of the deaf," with negotiators talking past one another on key issues while progressing on procedure.
Now, the Israeli electorate has rejected Yitzhak Shamir's ideologically driven quest for a Greater Israel that promoted settlements even at the expense of desperately needed aid from the United States.
Pressed by a stagnant economy and vast immigration, the voters have endorsed Mr. Rabin's approach that embraces settlements for security only and is prepared to cede some territory in exchange for peace.
"All we could do with Likud is tread water," said an Arab diplomat whose government has backed the peace process. "Now we know Israel is willing to give up territory. The question is how we bring it about."
The new Israeli flexibility is matched by a U.S. government that is less pro-Israel -- more "even-handed," as the Arabs say -- than any in recent memory, willing to risk bitter strife with Congress and Israel's American supporters to maintain a workable peace process.
Arabs "realize the best deal they can get is with George Bush," says James Zogby, executive director of the Arab-American Institute. "There's a realization that the Bush approach is going to be fair."
The combination holds out the prospect of a multi-layered deal that would advance the peace process on several fronts: some sort of an Israeli settlement freeze in exchange for loan guarantees to help absorb immigrants and a lifting of the Arab economic boycott of Israel.
With an Israeli government willing to compromise in the peace process, "the Palestinians have a choice," a senior administration official said. "They can match it, compromise and work to bring about a deal. Or they can blow it, and rather than match [with] flexibility, escalate their demands."
Analysts here warn that the Israeli change should not be oversold. This is a message that Arabs may be missing in their euphoria over Likud's defeat, as their statements yesterday suggested.
"This is the best scenario, a Labor coalition with the leftist power which is a driving force for peace and supports the two-state solution," Nabil Sha'ath, political adviser to Palestine Liberation Organization Chairman Yasser Arafat, told Reuters.
Jordanian Foreign Minister Kamel Abu Jaber said: "This is the end of an era and the beginning of a new page in Israeli politics."
"The peace process has been rescued from Likud attempts at sabotaging it," said Hanan Ashrawi, spokeswoman for the Palestinian delegation at the peace talks.
"Rabin is the center," stresses Martin Indyk of the Washington Institute for Near East Policy. He is willing to negotiate on the basis of security and not ideology. But to him, territorial compromise is not the same as land for peace. Indeed, Mr. Rabin's life experience has taught him that territory is "extremely important," Mr. Indyk said.
He said it was "high time" for Egypt to strengthen its peace with Israel, Palestinians to halt violence against Israelis and negotiate seriously and for Syria to decide that it's serious about peace.
"Rabin is tough -- he's no pushover," says Mr. Zogby. And Hisham Sharabi, chairman of the Center for Policy Analysis on Palestine here, voiced concern that Mr. Rabin, with his knowledge of Washington, might be so successful in winning over the Americans as to weaken the Palestinians.
But the Labor victory will allow both Israelis and Palestinians to zero in on an autonomy agreement, and "spell out the content of what an interim authority will consist of," said Mr. Sharabi.