The decision of Israeli police investigators to recommend the indictment of the prime minister, Mr Netanyahu, for fraud and breach of trust may have profound implications for the Middle East peace process. The revelation, made on Israeli television on Wednesday, is - in the words of the Labour opposition leader, Mr Shimon Peres nothing less than a "political earthquake".
Mr Netanyahu is the first Israeli prime minister to be threatened with indictment. It may be that the state prosecutor is not bound to accept the police recommendations - she is promising an announcement before the Passover starts on Monday - but there remains the strong sense that Israel may be facing into a sustained period of internal political turmoil. All of this will hardly enhance efforts to revive a faltering peace process which is in any case facing its deepest crisis of confidence since the Oslo accord between the Israelis and the Palestinians four years ago. There must now be a real danger that the political crisis in Israel will further complicate the already "threadbare process of peace making in the Middle East. A great deal of political courage and leadership are required to pull the process out off its present morass; a government whose own integrity is in question is hardly best suited for that task.
And this is a scandal very much of Mr Netanyahu's own making. He is accused of appointing a political crony, Mr Ronnie Bar On, to the key post of attorney general as a way of facilitating a plea bargain for an influential member of the ruling coalition. Mr Bar On, whose legal expertise was widely questioned, resigned after one day in office.
In characteristic style, Mr Netanyahu, attempted yesterday to brush off the allegations of corruption and impropriety. This government isn't going anywhere... we will stay just where the people and history put us", he said. The prime minister's aides were anxious to portray the controversy as a carefully manipulated ploy by partisan police officers and elitist forces anxious to overturn last May's election result. But the omens scarcely look propitious; some of Mr Netanyahu's ministerial colleagues have been slow to row in behind him and some of his minority partners in government might even welcome an election to capitalise on their popularity in the polls.
In Washington yesterday, officials insisted that the efforts to broker a new peace deal would continue and that the scandal was essentially an internal matter for the Israeli people. As if to prove the point, the US special envoy, Mr Dennis Ross continued his round of diplomatic contacts, meeting the Israeli foreign and defence ministers. But in truth the peace process is in a kind of suspended animation; Mr Netanyahu's decision to construct a large scale Jewish development in east Jerusalem, and his stubborn refusal to compromise, has become a critical bone of contention between Israel and the Palestinians. To compound the difficulty, there is now the very real prospect of a prolonged period of political instability in Israel. It is to be hoped that the US will not allow the process to wither; the great prize of stability in the region is still attainable.