THE WORLD FROM...Jerusalem

After two generations at war, and numerous failed initiatives, could this be the time for peace?

JUST possibly, this time, might it work? In Jerusalem, the pale flame of hope for a peaceful solution to the Middle East conflict is flickering again. Blown out by the harsh realities of regional intolerance so many times before, it has been kindled anew by United States Secretary of State James Baker III's visit to the area last week, and by a sense among many Israelis that the time may, perhaps, finally be right.

All of the details, most of the substance, and even a good part of the conceptual bedrock of any settlement still remain to be worked out among the US, Israel, and the Arab countries. But recent changes in the shape of the world suggest to some people in the government here that they have the best chance since their nation was created in 1948 to make peace with their neighbors.

In the broadest context, Israeli leaders take comfort in the Soviet Union's withdrawal from the world stage as a superpower with the muscle and will to back its Arab allies to the hilt.

Israel's refusal to take part in any sort of peace talks cosponsored by Moscow has now softened, as one official here explained privately, "because the Soviets would be there at the invitation of the Americans, on sufferance, not as a countervailing influence."

At the same time, there are unmistakable signs that a number of Arab governments, especially the conservative kingdoms of the Gulf, are prepared to consider the possibility of peace with Israel.

Even Israel's most implacable foe, President Hafez al-Assad of Syria, has reportedly been hinting to Western diplomats that on the right terms he might find it in his interest at least to end his country's state of belligerency toward the Jewish state.

On the Palestinian question, as Israeli leaders contemplate the sort of deal they would be ready to strike, they know they enjoy one advantage that will not last indefinitely: The Palestine Liberation Organization leadership is at its lowest international esteem ever in the wake of its support for Iraqi leader Saddam Hussein.

That is a weakness Israeli Premier Yitzhak Shamir must be eager to exploit. At the same time, Mr. Shamir does have a few chips he can cash in with the Americans, earned by his decision not to retaliate against Iraqi Scud missile attacks on Tel Aviv.

The thrust of Israel's interest in the new diplomatic process, as officials keep emphasizing, is not the Palestinian issue but the prospect that peace treaties like the one Israel signed with Egypt at Camp David might be possible with the rest of the Arab world.

But under Mr. Baker's "twin track" approach, that prospect goes hand in hand with a resolution of the Palestinian problem, and the whole idea of negotiating with the enemy - whether in Damascus or the occupied West Bank - has sparked a frenzy of debate in Israel. Deep insecurities are coming to the surface, as concerns of giving anything away threaten the spirit of compromise that would be essential to a solution.

The debate will only grow more fierce if the peace process continues. And the government's decision on how much to offer will undoubtedly provoke angry accusations of betrayal.

For the time being, however, the fragility of the whole peace process is illustrated by the way the Israeli government is approaching UN Resolution 242, which calls for Israeli withdrawal from the occupied territories and guarantees the existence within secure boundaries of all states in the region.

This resolution has been the cornerstone of all peace efforts since it was drafted more than two decades ago. Israel now argues that its meaning is open to interpretation. That perhaps explains why the flicker of hope has not ignited any flame of enthusiasm. The Middle East has been through too many failed peace initiatives for every hope not to be dogged by a matching doubt.

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