Mideast Crucible

THE United States last week found itself in the curious position of pushing for a broader Arab-Israeli peace in the Middle East, even as it threatened renewed war against Saddam Hussein to force compliance with United Nations cease-fire terms. It was another lesson in the enduring paradoxes, and dangers, in that part of the world.The latest move to break through Saddam's obduracy was justified. Iraq agreed to full disclosure and removal of its capacity for nonconventional warfare. But UN efforts to inspect and catalog Iraqi missiles and chemical and nuclear weapons facilities have consistently hit roadblocks. Then Saddam tried to ban helicopter flights over his territory by UN monitors. That's when President Bush stepped up with an offer of US jet-fighter escorts for UN personnel. No one, perhaps least of all the Iraqi people, wants another outbreak of hostilities. But Saddam flirts with that risk as he tries to shake free of international surveillance and sanctions. He lost his claim to unfettered sovereignty through his own actions in the past year; the US and its allies on the UN Security Council are right to remain tough. The US is also right to hold its ground regarding Israel's request for $10 billion in loan guarantees to help resettle Soviet immigrants. Backing down from Mr. Bush's call for a four-month delay on the request could hopelessly muddy the prospects for a regional peace conference this fall. The linkage between the loan deal and settlements in the territories occupied by Israel since 1967 is unavoidable. Under current Israeli policy, extra resources can't help but bolster the settlement program. Israel should accept the US assurances of help with the absorption of immigrants and agree to postpone its request. The alternative is a divisive battle in Congress over the guarantees - a battle that's likely to leave no one, least of all Israel, unscathed. The Middle East remains a crucible for Bush's vision of a new world order. UN reluctance to infringe on the sovereignty of a member state appears to have melted down during the Gulf conflict and its aftermath - with far-reaching implications. Likewise, the changes being forced on the US-Israel relationship are portentous. The US is applying its aid lever. The result could be a backlash in Israel, miscalculation by the Arabs, and a darkened outlook for peace. But just as likely, it will strengthen Washington's standing as an honest broker and ultimately enhance the prospects for meaningful talks. Those talks, increasingly in doubt, could still be a first, tentative step toward an end to decades of conflict.