Middle East on the Brink

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There is already plenty of both. But until now the U.S. has shown little ability to do much about it. From the start the Bush Administration was divided about America's role in mediating the conflict, with Powell pushing for engagement and Dick Cheney arguing for a freer rein for Sharon. That division, presided over by an inexperienced President, resulted in paralysis. Once Bush declared a global war on terror, Arafat's failure to curb terrorist groups like Hamas and Islamic Jihad made the hard-line position unimpeachable. But partly at the prodding of nervous Arab allies, the U.S. has begun to look for ways to nudge the Israelis and Palestinians back to the negotiating table. Last week the State Department latched onto a tentative offer made by Saudi Arabia's Crown Prince Abdullah bin Abdul Aziz al Saud for the Arabs to grant Israel a full peace if the Israelis withdraw from all territory seized in the 1967 war. An Arab diplomat says the initiative "puts Sharon in a corner...[and] it signals to the U.S. government, 'If you get engaged, there are important friends in the Arab world who will work with you.'"

Those friends know the Administration needs them for a potential showdown with Iraq. Any U.S. operation would likely require the use of bases in Saudi Arabia or an alternate Gulf state such as Qatar or Kuwait. Diplomats in the region told TIME many Arab leaders say they will not offer support to an anti-Iraq campaign while the Israeli-Palestinian conflict is boiling. Expressing skepticism about the U.S. war on terrorism in an interview with Time, Abdullah said that "America cannot fight this war alone" and that he does "not believe that the war on terrorism applies to Iran and Iraq"—but refused to say whether Saudi Arabia would support a U.S. attack on Baghdad. Translation: he might, but he's going to insist that in return America secure a settlement between Israel and the Palestinians.

Even if a peace offensive gets off the ground, the Israeli and Palestinian belligerents may not notice. In just the last month, the ferocity of the conflict has taken on new dimensions. The catalyst for the current round of hostilities was the Feb. 14 bombing of an Israeli Merkava Mark 3 tank in the central Gaza Strip, which killed three Israeli soldiers. An Israeli official told Time the bomb contained the high-density plastic explosive C-4, large amounts of which the Israelis believe are being smuggled into Gaza through tunnels running under the Egyptian border. "It's frightening to think that the next suicide bomber will have C-4 in his belt," says a senior Israeli security official. "The destruction will be far worse than anything we've seen before."

The tank bombing embodied the unpredictable nature of the threat posed by militant Palestinian groups. Responsibility for the attack was claimed by the Committees of Popular Resistance, which includes Arafat's Fatah organization as well as the terror groups Hamas and Islamic Jihad. Though it has adopted Hamas' suicide-bombing strategy, Fatah wants to improve its image from that of a bunch of terrorists attacking civilians to one of an independence movement fighting Israeli oppressors. Strikes against soldiers at checkpoints play to the Palestinian street, since those barriers are commonly seen as symbols of humiliation. And Fatah leaders think continued assaults on Israeli military targets in the occupied territories, like the ones staged last week, will ultimately turn Israeli opinion against keeping settlements in the West Bank and Gaza Strip.

Those hopes are still quixotic. Israeli morale has strained under the weight of endless violence—European embassies report a rise in the number of Israelis applying for passports in the past year—but outrage at Palestinian terror is boundless. Polls show that more than 40% of Israelis want the army to retake land held by the Palestinian Authority. A majority still supports Sharon's merciless campaign against Arafat and suspected Palestinian terrorists. Few Israelis see an end to the violence, and most are prepared to keep fighting. Last week Sharon tried to boost public spirits by recounting the country's achievements and resilience. In the understatement of the year, he added, "These are not easy times." They could still get a lot worse.

—Reported by Massimo Calabresi/Washington; Jamil Hamad, Aharon Klein and Simon Robinson/Jerusalem; and Scott MacLeod/Cairo