Scarcely five months ago, following Secretary of State Henry Kissinger's triumphant shuttle spectacular between Israel, Egypt and Syria, chances for a Middle East peace looked unbelievably bright. This week, as Kissinger undertakes another flying tour to Cairo, Damascus, Amman and Jerusalem, hopes for a settlement have been dangerously tarnished. One reason is that no one seems to know how to solve the problem of the displaced Palestinians—including the Palestinians themselves.
Alarmed by a resumption of terrorist raids over the Israeli border, Premier Yitzhak Rabin last week summoned a Cabinet meeting to review counterterror precautions. At the same time, the Palestine...