That historic handshake in Washington between leaders of the Palestine Liberation Organization and Israel has already resulted in a decision by the Clinton administration to commit a preliminary $250 million in economic aid for the Gaza strip and the Jericho area of the West Bank. Further commitments are expected from the World Bank.
The apparent new order also radically alters the role of Jordan, dramatized the other day by another Washington handshake under President Clinton's auspices. This one linked Israeli Foreign Minister Shimon Peres and Crown Prince Hassan, brother and foreign minister to Jordan's King Hussein. Such a climate of reconciliation between Israel and Jordan could be extremely important to the economies of both countries.
Among the leading possibilities for cooperation is a project to save the mineral-rich Dead Sea, which is rapidly disappearing because its sole inlet, the Jordan River, is tapped upstream for irrigation projects. Both Israel and Jordan extract potash and other chemicals from Dead Sea water. These chemicals provide almost a third of both countries' export earnings.
Alarmed by a 30-foot drop in the Dead Sea's level over two decades, Israel in the early 1980s offered Jordan a joint and mutually beneficial project. A water tunnel would be dug from the Mediterranean Sea, probably originating in the northern Gaza, across southern Israel and into the Dead Sea.
Because the Dead Sea -- actually a salt lake -- is the lowest spot on the earth, the water would fall nearly 1,300 feet on its journey from the Mediterranean. Hydroelectric projects taking advantage of this drop could handle 20 percent of the peak power load of the two energy-starved countries, according to Israeli engineers.
Israeli engineers actually made a start on the tunnel project in the mid-1980s, taking test borings along the route, but they decided that to attempt the tunnel unilaterally was too expensive. In the meantime the Dead Sea's level has continued to drop, jeopardiz- ing an important segment of the economy of both bordering countries.
Though the Jordan River flows into the Dead Sea, there is no outlet. In the barren, rainless surroundings, the fierce heat of the sun causes the water to evaporate rapidly. The chemical extraction process is accomplished in both Israel and Jordan by pumping water out into shallow ponds, where it evaporates completely, leaving a residue of valuable chemicals.
But if the Dead Sea itself were to evaporate beyond a certain point, its salts would so concentrate as to make the extraction difficult or impossible.
It is well known that King Hussein has always yearned for economic cooperation with Israel, but the uneasy political situation in Jordan has heretofore made this impossible.
The obvious economic benefits from the tunnel were tempting to the king, but he has had to live with a situation that continuously threatens his survival. Palestinians, both indigenous and refugees from the West Bank and Israel, constitute more than half of Jordan's population.
In 1970, in a campaign now known by Palestinians as "Black September," Hussein waged war against his own dissidents, including PLO elements led by Yasser Arafat, who were reputedly preparing to overthrow the king. He was successful in suppressing the revolt, but since then he has walked a political tightrope to sustain his uneasy monarchy.
Now, however, the astounding breakthrough that has seemingly turned the Middle East upside down has profoundly changed Jordan's prospects. Up to now, if Hussein had dared to make any kind of deal with Israel, Mr. Arafat and the Palestinians would have condemned him a traitor. But Mr. Arafat has made his own deal with Israel. He can hardly denounce Hussein for doing the same.
The water project thus becomes politically feasible for the king -- fTC and could be economically helpful to the Palestinians as well.
Now that the Palestinian bugaboo seems likely to vanish from King Hussein's political equation, he may find that Israel will make an offer that he can't refuse.
Stanley A. Blumberg and Gwinn Owens are co-authors of a book on Israeli intelligence, "The Survival Factor."