THE Palestinian President, Mr Yasser Arafat, is refusing to meet his aides. Syria is comparing him to Adolf Hitler. More moderate Arab 51 ales are warning him that his rejection of the land for peace formula is killing off hopes for Middle East reconciliation.
And yet the most pressing crisis preoccupying the Israeli Prime Minister, Mr Benjamin Netanyahu, centres not on Israel's deteriorating relationship with its Arab neighbours but on signs of economic collapse.
Less than a month after taking office, Mr Netanyahu, who has made economic reform a centre piece of his political platform, is battling to stave off economic meltdown. The Tel Aviv stock market fell another 4.5 per cent yesterday, continuing a nose dive that saw 10 per, cent wiped off share values in nine days.
The national trade union movement is holding a general strike today, to protest at a programme of planned budget cuts that seems to target mainly poorer and middle income groups. Unemployment is heading back up after years of decline. And scepticism among potential foreign investors about Israel's medium term growth prospects is threatening to destroy Mr Netnayahu's ambitious plans for large scale privatisation, of government owned companies.
The prime minister has been locked in marathon, meetings with his economic officials and advisers for most of the past two, days, trying to find a way out of the crisis. "We cannot go on like this," he was quoted as telling his finance minister at one point. A market shakedown is the last thing we can afford right now.
Israel failing economic profile combines with growing Arab concerns over its political direction under Mr Netanyahu's stewardship. The prime minister is to travel to Egypt tomorrow for talks with President Hosni Mubaiak, and the Egyptian leader yesterday prepared for that visit by hosting Syria's Foreign Minister, Mr Farouq a Sharaa and Jordan's Prime Minister, Mr Abdul Karim Kabariti.
Though anxious to keep good ties with the Egyptian and Jordanian leadership Mr Netanyahu remains intent on avoiding face to face talks with Mr Arafat. In angry response. Mr Arafat this week refused to meet one of the prime minister's aides, Mr Dore Gold, a policy adviser who is the highest ranking official Mr Netanyahu has thus far consented to dispatch to Gaza.