Spirit of Middle East peace deal has long since ebbed away Moves towards an overall settlement have been dogged by bad timing

The way the Israeli government spins it, the peace partnership with the Palestinians is nowhere near collapse. "There are some difficulties," admits Mr Avigdor Kahalani, the Minister of Internal Security, who met Mr Yasser Arafat in Gaza earlier this week. "But there is no crisis."

Indeed, while US officials give private briefings lamenting the failure of would-be peace mediator Mr Dennis Ross's latest mission to the region, the US Secretary of State, Ms Madeleine Albright, has been urging American-Jewish leaders to try and make the Israelis see reason.

Her spokesman publicly entertains the possibility of the US "disengaging" from the peace effort. Yet the Israeli Prime Minister, Mr Benjamin Netanyahu, and his circle seem to be living in an alternative reality. To their mind, Mr Ross's visit was a modest success. "Progress was made," insists a key adviser to Mr Netanyahu, Mr David Bar-Illan.

Another aide suggests that Mr Ross might be back in the Middle East next week, further refining proposals on the next peace moves and perhaps even concluding an agreement on a long overdue Israeli troop withdrawal from West Bank land.

The Israelis might have a point: the US may not be ready to throw in the towel just yet. Mr Ross could still hold another round of frenetic shuttling from Jerusalem to Gaza and back. And though it is unlikely, it is not inconceivable that agreement might be reached on an Israeli pullout from another 10 per cent or so of West Bank territory.

But if the Yitzhak Rabin-Yasser Arafat effort to end decades of Israeli-Palestinian conflict has not yet collapsed irrevocably, its demise appears very close.

And, as much as anything else, it is dying because of what might be summed up as bad timing.

To put it simply, by the time the Palestinians had recovered from the shock of the 1967 war, and were prepared to negotiate a recipe for coexistence on land which both sides coveted, the Israelis were no longer in the mood for compromise.

The seizure of the West Bank, the Gaza Strip and the Old City of Jerusalem (not to mention the Sinai Desert and the Golan Heights) in six days of fighting triggered a jubilation among a small proportion of Israeli Jews who saw in the "restoration" of this Biblically-promised land proof of divine delight in the modern state. They set about settling this captured land, building homes and planting crops.

As the years passed, these new pioneers, as they saw themselves, grew in number, won increasing political support and, crucially, secured the spiritual endorsement of many of Israel's mainstream rabbinical leaders.

And so when, 41/2 years ago, Mr Rabin and Mr Arafat shook hands on the White House lawn - a handshake which signalled the imminent relinquishing of this divinely-bestowed land - the settlers, their political backers and their rabbinical sponsors were appalled and set out to thwart the new peace accords.

When the Palestinians' own extremist fringe, the Islamic radicals of Hamas and Islamic Jihad, expressed their opposition to Israel's very existence by blowing up Israeli buses, many hundreds of thousands of other Israelis grew sceptical and afraid. And as the extremists gradually imposed themselves on the mainstream, the prospects for permanent Israeli-Palestinian peace grew dimmer.

First, in November 1995, Mr Rabin, the former general who had overseen the capture of the occupied territory in 1967, and was more qualified than any other leader to explain why Israel's security would be enhanced by its return, was assassinated. Inevitably, the killer was an Orthodox Jew, Yigal Amir, who cited a perverse interpretation of Jewish law, prizing land over life, to justify his crime.

Then, in the space of eight days, as post-assassination election campaigning began in the spring of 1996, Hamas carried out four suicide bombings. Mr Shimon Peres, Mr Rabin's temporary successor, seemed helpless.

Mr Arafat - having tried once, feebly, to crack down on the Islamic militants and ultimately opted for an uneasy coexistence with them - issued a stream of condemnations but failed to arrest the bombers.

And Mr Netanyahu, the smooth-talking, hardline candidate Mr Peres had neglected to take seriously, swept into the prime minister's office on a wave of anti-Arafat rhetoric. It was a close race. Mr Netanyahu's margin of victory was less than 1 per cent. But the moment the election results were published, it was clear that the Rabin-Arafat peace accords had no future.

In partnership with Mr Rabin, Mr Arafat had been walking a path to independent Palestinian statehood. It was clear that Israel would ultimately withdraw from almost all of the West Bank. Difficult though the talks would be, it was also clear that some answer would have to be found to the Palestinian demand for a stake in Jerusalem.

With Mr Netanyahu in power, the picture was radically different. There could be no partnership between an Israeli leader and a man he continued to regard as a terrorist. No way that Mr Netanyahu would willingly give up the very land on which he fervently hoped hundreds of thousands of Jews would make their homes.

The hopelessness of the situation was underlined by the Israeli-Palestinian gun battles which followed Mr Netanyahu's secretive opening of a new entrance to an archaeological tunnel in Jerusalem's Old City in September 1996. It was confirmed by the suspension of all negotiations in the wake of Mr Netanyahu's decision a year ago to start clearing land for a new Jewish neighbourhood on disputed territory at Har Homah, on the southern edge of Jerusalem.

And now, after a year of delay and argument over troop withdrawals which Mr Netanyahu, not Mr Rabin, had personally pledged to carry out, the hopelessness of the situation has finally become apparent to the US as well.

Had the Clinton administration been prepared to apply real pressure a few months ago, when Mr Netanyahu was performing poorly in the opinion polls, when the resignation of his foreign minister, Mr David Levy, had destabilised his coalition, it might have found the Prime Minister more vulnerable. It might have extracted a further chunk of West Bank territory from his grasp.

It may yet if Mr Ross is prepared to subject himself to yet another series of Middle East meetings. But the essence of the peace process has long since ebbed away. It was never about 13.1 per cent of this, or 11 per cent of that, but about trust, mutual respect and a shared awareness that, for all the painful compromise involved, both sides would benefit from a negotiated solution.

Now, barring dramatic political shifts in Israel, the future spells only increased Palestinian frustration, despair among moderate and left-wing Israelis, and the prospect of further violence.

Unless someone formally reads the last rites before then, the Oslo peace framework will have run its course by May 1999, Mr Arafat will declare independent statehood in those areas of Gaza and the West Bank which he controls and most nations will recognise the new Palestine.

And another generation of Israelis and Palestinians may have to fight over where the border runs between them.