Events of the past few weeks have virtually killed off all hopes in the Arab world for progress toward peace in the Middle East. Even the one existing achievement of the American-guided peace process -- the 1979 Egyptian-Israeli accord -- is now perceived to be under threat. Observers here say the United States and Israel will have to come up with a major new initiative if the situation is to be reversed.
The latest dramatic events -- the Oct. 1 Israeli air strike on the Palestine Liberation Organization headquarters in Tunis, the killing of seven Israelis four days later by an Egyptian policeman in Sinai, the hijacking of the Achille Lauro by Palestinian gunmen, and the US interception of an Egyptian airliner with the four hijackers on board -- have helped to accelerate and crystallize a number of trends that had already become increasingly apparent.
The net result is that any realistic assessment of the situation must include the following elements:
The peace strategy launched by Egypt, Jordan, and the PLO, based on a Feb. 11 accord between Yasser Arafat and Jordan's King Hussein, has run completely into the sand, as the US and Israel continue to refuse to deal with the PLO.
Moderate Arab leaders are bitterly disappointed at US failure, as they see it, to respond to their initiative.
Egypt's relations with Israel are now worse than they have been at any point since the signing of the Camp David peace accords in March 1979. Bitterness and disillusion prevail on both sides.
The one party capable of healing the breach between Cairo and Tel Aviv -- the US -- now has an increasingly bitter row of its own with Egypt. The US interception of the Egyptian plane has led to an upsurge of nationalism in both countries, which seem to be drifting further apart as a result.
For these and other reasons, Egypt's relations with the Arab world are continually improving. The original idea of Camp David was that Egypt would provide a bridge between Israel and the rest of the Arab world. Egypt is now rebuilding bridges with Arab states while its own bridge with Israel is barely standing.
Since Egypt is the cornerstone of US policy on the Arab side of the Middle East peace equation, it goes without saying that there can hardly be any progress in peace moves until the crisis in American-Egyptian relations arising from the American interception of the Egyptian Boeing 737 last Thursday night is overcome.
``This action is not at all helpful to progress on the road to peace . . .,'' President Hosni Mubarak said Saturday. ``It will take a long time for us to forget this wound . . . I have told the Americans many times that before taking any step regarding Egypt, they should study deeply and precisely the psychology of the people, not only in Egypt but in the whole region.''
The gulf between the two countries appears to widen daily. President Mubarak, responding to a wave of anti-American anger rippling through Egypt and the Arab world, has become tougher and firmer in his stand against the US.
``No to America!'' read a banner headline on the front page of the Cairo weekly Al-Shaab on Tuesday. ``No to piracy, hegemony, and American official terrorism!'' The paper, published by one of the tolerated opposition parties, and others are calling for a reassessment of Egypt's relations with the US and an end to the peace with Israel.
The newspaper expressed the feelings of many Egyptians and Arabs, and highlighted their perception that recent events have produced an ever-closer relationship between the US and Israel.
``The Israeli raid on our Tunis headquarters could not have been carried out without US military help and cover,'' said Nabil Shaath, a close associate of PLO chairman Yasser Arafat. ``Al-shaab'' claimed Tuesday that Israeli intelligence enabled the US F-14s to be in the air 15 minutes before the Egyptian airliner even took off.
Many ordinary Egyptians expressed unqualified support for Mubarak's angry stand. ``I was personally enraged,'' said a Cairo cab-driver. ``You don't expect treachery from a supposed friend.''
But the signs are that the estrangement goes deeper even than the Egyptians' belief that their sovereignty and dignity have been insultingly infringed.
Cairo and the Palestinians saw the US interception as a blow directed at the PLO. ``We wanted to give Arafat a chance to show the world he would keep his word and put the hijackers on trial,'' said Mubarak. ``I'm sure he would have, since they had killed one of the passengers.''
But the US action robbed him of the chance to gain respectability. Mubarak probably wanted to give him a break because, according to the PLO representative in Cairo, Saeed Kamal, the Egyptian leader felt that the Israeli raid on Tunis was a direct blow to Mubarak's own peace initiative, in which the PLO has a key role.
While Egypt, the US, and Italy have all been involved in bitter rows and recriminations over the affair, the one relationship which appears to have survived and even improved is that between Cairo and the PLO. ``There are no problems or strains at all,'' said Dr. Shaath.
But Shaath believes that the peace process is dead and cannot be revived. ``You cannot talk with the Americans in their current lynch-mob mood, led by Ronald Rambo,'' he said. ``The peace never had a chance anyway.'' He predicted an ugly upsurge in the spiral of violence and counter-violence.