The worst suicide bombing atrocity of the current Palestinian rebellion against Israeli occupation has coincided with the most hopeful Arab diplomatic initiative to address the conflict. This combination of events raises the deepest challenges to Israel's existence in the Middle East region.
Last night, the Palestinian leader, Mr Yasser Arafat, offered an immediate and unconditional ceasefire, as Israeli tanks moved back into the occupied territories. The Israeli prime minister, Mr Sharon, was under strong international pressure to restrain military action while the Arab League summit was being prepared. Those responsible for attacking the Passover ceremony in Netanya - in which at least 21 people were killed and over 100 injured - were fully aware of this. They struck to provoke a retaliation that would undermine the promise of yesterday's offer from the Arab League. Mr Sharon's government is caught between an Israeli public deeply sceptical about reaching an agreement with Mr Arafat's Palestinan Authority and international pressure for a ceasefire.
A calm Israeli assessment of the Beirut Declaration unanimously adopted by the Arab League yesterday would surely reveal much that is acceptable and more that is negotiable if a satisfactory resolution of the conflict is to be found. It offers an end to the Arab-Israeli conflict and normal relations with Israel in return for an Israeli withdrawal to its 1967 borders and a just solution of the Palestinian refugee problem. The initial Israeli response rejected these terms, with Mr Sharon saying that his country cannot accept all the 3.6 million Palestinian refugees back, since that would destroy the Jewish state.
In fact the proposal on refugees explicitly allows for a compromise involving compensation and an Israeli recognition of the wrong done to them. In the words of Mr Nabil Sha'ath, Mr Arafat's adviser, it concerns a freedom not a requirement of return. He regards several other major issues as being virtually solved, including final borders, Israeli settlements. water and the status of Jerusalem. That sounds utterly optimistic, so far as Mr Sharon is concerned.
There remains the deeply problematic question of whether it is possible to restore a relationship of trust between such polarised antagonists given the pressures they face within their own political communities. Efforts by President Bush's envoy, General Anthony Zinni, to secure a ceasefire in which security co-operation and political dialogue can be renewed are more necessary and much more difficult after this latest atrocity.