Peace in Palestine

Trotsky called war the motor of history. The fall of Baghdad has opened up the prospect of a renewal of the Israeli-Palestinian peace process. Thirty months of unrelenting Palestinian terrorism and Israeli repression have left 2,700 dead and tens of thousands wounded - a figure almost as high as that of Northern Ireland over a period of 30 years. How, after all that, can peace be possible?

In the Middle East the First World War abruptly terminated four centuries of Ottoman Turkish dominance over the Arabs. The Suez war of 1956 tolled the death knell of British and French imperialism in the region. The 1973 Yom Kippur War led directly to the Israel-Egypt and Israel-Syria disengagement agreements and paved the way for the Israeli-Egyptian peace treaty. The First Gulf War in 1991 was the catalyst for the secret Israeli-Palestinian talks that culminated in the reluctant handshake between Yitzhak Rabin and Yasser Arafat on the White House lawn in 1993.

Will the Second Gulf War yield a similar systemic shakeout that could enable Israelis and Palestinians to resume the negotiations they suspended in January 2001? Both desperately seek a way out. The Palestinians, their cities besieged, their population in penury, their self-governing Authority virtually extinguished, face living conditions that are unendurable.

The Israelis, threatened daily by terrorism, their economy in freefall, confront an existential challenge that appears increasingly unsustainable. The short-term pressures are piling up on both to seek some release from war without end and without hope of victory for either side.

Nor is that all. Beneath the surface of current events we can discern a movement of underlying forces that are likely, sooner rather than later, to precipitate far-reaching diplomatic change.

The first great shift is demographic. For the past 100 years Zionism has cherished one central aim: a Jewish majority in a Jewish state. Today, out of 10 million people between the Mediterranean and the River Jordan, 5.3 million are Jews and 4.6 million are Arabs. Until recently the Jews were able to maintain their majorthatity through large-scale immigration, but that has virtually dried up and is unlikely to resume given the emptying of the last reservoir of potential emigrants in the former Soviet Union. In view of the much higher Arab birth rate, the Jews will almost certainly become a minority within the very near future. The result is to dictate - earlier rather than later - Israeli territorial retraction.

Israel's demographic defeat is accentuated by the economic interdependence of Israelis and Palestinians. According to the World Bank more than half of the labour force in the West Bank and Gaza is unemployed. The main reason is the closure of the Israeli labour market against all but a few Palestinians. Without access to jobs in Israel, there can be no hope for a revival of the Palestinian economy. Meanwhile, the Israelis, too, have found it hard to do without Palestinian workers. They have tried importing foreign temporary labourers from Malaysia, Ghana and China. But Israel has found that such guest workers bring a raft of lasting social problems. The Israeli and Palestinian economies thus find themselves locked in a kind of wrestler's embrace.

The Holy Land is one of the most densely populated countries in the world - particularly if one excludes the large areas of barely inhabited desert. Resources, especially water, are limited and in many cases have been exploited beyond sustainable levels. Hydrological experts from Israel and Palestine have joined together to emphasise that the choice is between cooperation - from which both gain - or competition, from which both lose.

The United States is now approaching diplomatic payback time to those countries helped the war effort in Iraq. Mr Blair has been pressing strongly for US reengagement in the Israeli-Palestinian peace process. So have Arab states such as Egypt, Jordan and Saudi Arabia that have been aiding the Americans privately even as they criticise them publicly.

President Bush has promised his "personal support" for the "road map" for peace formulated by the United Nations, the European Union, the Russians and his own State Department. The plan sets out sequential steps to be taken by each side. Israel's attempts to secure emendations in the plan have been firmly squashed by the US - a possible augury of a stiffening American attitude towards Israel. Mr Bush has made it clear that he endorses the creation of a Palestinian state that is "viable" and "credible" - that is, not a series of disconnected cantons without territorial contiguity and without genuine sovereignty. US commitment to such a state may not by itself be the panacea that some imagine: but it could provide a convenient cover for Mr Sharon's coalition government in Israel to withdraw from exposed positions.

Can religious fanatics and ideologues once again derail the peace process? The power of these extremists should not be over-estimated. The basic thrust of both Zionism and the Palestinian nationalist movement over the past generation has been overwhelmingly secular rather than religious. The Palestine Liberation Organisation, from its inception, has been predominantly secular in its complexion. The Israeli general election in January showed that there has been a powerful backlash against religious extremism in Israeli society.

Ideologies are never frozen and immobile: they evolve or die. Both Zionism and Palestinian nationalism have changed over the years and are changing today in response to internal and external stimuli. The shock waves of war could now, as in the past, help thrust old antagonists along the path of accommodation.

Bernard Wasserstein is the author of Israel and Palestine: Why They Fight and Can They Stop? (Profile Books).