A rocky path lies ahead for Mideast talks; Accord: As negotiations begin on a final peace, Israelis and Palestinians must deal with the toughest issues.


JERUSALEM -- Here's one measure of how far Israelis and Palestinians have come toward peace: When they met in Oslo, Norway, more than six years ago, they did so in secret. No Israeli government was prepared to deal openly with Yasser Arafat's Palestine Liberation Organization.

Now the meetings are in the open, and handshakes -- sometimes hugs and kisses -- are routine. But the sides are still short of peace, for the hardest parts have been saved for last.

It was to help close those final gaps that President Clinton -- with a big assist from Leah Rabin, widow of slain Israeli peacemaker Yitzhak Rabin -- brought Arafat and Rabin's protege, Prime Minister Ehud Barak, to Oslo this week. Both men promised a good-faith effort to move ahead toward a final agreement in less than a year.

If they succeed, they will bring a formal end to a century of bloody confrontation that has seen five wars between Israel and its Arab neighbors.

The fundamentals are contained in United Nations resolutions calling for Israel to return land captured in the 1967 Middle East war in exchange for peace with its Arab neighbors. The West Bank was taken from Jordan and the Gaza Strip from Egypt in a war that lasted only six days but changed the political geography of the region. The United Nations added substantial maneuvering room for Israel by recognizing its right to secure borders.

A lot has happened in the six years since the original Oslo accords were signed, even allowing for an interlude during the administration of Prime Minister Benjamin Netanyahu when the peace process came to an effective standstill.

Significantly, Israel accepted the Palestinians' choice of Arafat as their leader after years of vilifying him as a terrorist who could never join discussions of peace. After ending a long exile, Arafat divides his time between Gaza City and the West Bank city of Ramallah and presides over a young, unsteady government.

After decades of occupation -- first by Jordan and then by Israel, Palestinians now have considerable control over their own lives, as the Palestinian Authority has taken over many civic functions. For the Palestinian people, this is something of a mixed blessing, because Arafat shares the autocratic tendencies, corruption and cronyism common among Middle East leaders.

Palestinians have also gained some of the trappings of sovereignty, such as their own airport and license plates, and high-visibility commercial enterprises such as the Oasis casino in Jericho. All were simply unthinkable a decade ago.

Still, there are frequent reminders that ultimate authority is in Israel's hands. Israel controls the borders and access to Jerusalem. It decides who can move freely between Palestinian areas in the West Bank and Gaza. And repeated border closures have disrupted Arabs' ability to work in Israel, dealing a blow to the Palestinian economy.

One of the biggest sources of continued tension is the land. Starting with Gaza and Jericho, Israel has been withdrawing its occupation forces in negotiated phases, relinquishing some territories outright and in others sharing control with the Palestinian Authority. Even in areas under Palestinian control, Israel has kept hold of small pockets to protect Jewish settlements.

The result is a patchwork of Palestinian areas interspersed with Israeli-held zones that leaves Palestinians wondering if they will ever have something that could be called a state.

While withdrawing from some areas, Israel has strengthened its grip on others by enlarging settlements and building highways to link them with Jerusalem and Tel Aviv.

For Israel, the past six years have hardly been tranquil.

The assassination of Rabin four years ago by a Jewish zealot was a horrifying reminder of how fiercely some Israelis opposed any concessions to the Palestinians. When Rabin's successor, Shimon Peres, continued moving ahead, enemies of peace on the Arab side unleashed a wave of bombings in Israel that left scores of Israelis dead. Fearful for their safety, Israelis voted in the next election for a government that put security before peace.

So flagrantly did Netanyahu slow the peace process that his government was snubbed by much of the world, including the United States.

Now, leaders on both sides are ready once again to move forward. Barak basks in a peacemaker's international approval, committed to the notion that agreements will enhance Israel's long-term security. Arafat's health is uncertain, giving him an incentive to nail down a settlement while he still can.

Final status issues

The issues that remain to be negotiated in the final status talks beginning next week are clear. They have been put off until now because they are tough at best, insurmountable at worst.

Palestinians yearn to have the historically Arab eastern section of the holy city as their capital. Israelis claim an "undivided" Jerusalem as their eternal capital. A compromise seems difficult, if not impossible. Some Israeli leaders would like to put this issue off for several years at least.

Few now doubt that there will be a nation called Palestine. The question is how much independence it would have. Will it control its borders, foreign policy and economy?

Barak speaks often of a "separation" between Israel and the new Palestinian entity, leading some to fear that Palestine will simply be set adrift economically.

A several-million-strong Palestinian diaspora, displaced by war in 1948 and 1967, is waiting to know its fate. How many will get to return, and to where? And will those who can't return be compensated for their losses, and if so by whom?

Israel insists that none will have the right to return to Israel; how many can return to the West Bank and Gaza is the Palestinians' problem. Gaza is already one of the most densely populated pieces of real estate in the world, and many Palestinians are unemployed. A huge influx of refugees would only add to the problem.

Under international law, Jewish settlements in the West Bank and Gaza Strip are illegal. But the history of Israel teaches that legality is a flexible concept in the eyes of the world.

Rather than dismantle them all, Barak wants to concentrate them in blocs. Even this would likely provoke a furious reaction from the Israeli right wing. The question for Palestinians is how much land they will end up with and whether pockets of Jewish settlements will interfere with contiguity.

In the Middle East, water is a precious and scarce commodity. Wars have been fought over its control for centuries. Israel draws water from a large aquifer, much of which lies under the West Bank. A durable settlement will require some kind of equitable water-sharing arrangement.

The 'final sprint'

Talks are scheduled to get under way next week. As negotiations progress, the crucial decisions will likely be made in private between Barak and Arafat. If the past is a guide, deadlines will be broken repeatedly.

Even when Americans aren't directly involved, the U.S. role is crucial. Like Israel and Egypt before it, the Palestinian Authority has become an aid client of the United States. Even though much of the help comes from international organizations and the Europeans, Washington has been the catalyst.

Clinton, while nearing lame-duck status at home, retains considerable prestige in Israel and thus has considerable influence over the process. He is likely to exert it during a lengthy summit -- perhaps at Camp David in February -- that would be reminiscent of President Jimmy Carter's brokering of an Israeli-Egyptian settlement more than two decades ago. Success would brighten his foreign policy legacy.

In what has been called their "final sprint," Israelis and Palestinians will have to keep looking over their shoulders for troublemakers in each camp. A major bombing, or even sustained rock-throwing riots of the kind that flared briefly in Bethlehem last week, could easily escalate into a crisis big enough to derail the entire peace process.

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