IN spite of the turmoil in the West Bank and Gaza, the Middle East peace process has reached a point where the perennial strife between Israel and the Palestinian people can be attenuated or possibly ended with bold, imaginative United States diplomacy. With the exception of Libya, all the Arab states, along with the Palestine Liberation Organization, have signaled their readiness to accept the permanence of Israel as a Jewish state with recognized borders in return for an indispensable quid pro quo - the recognition of the right of a displaced Palestinian nation to self-determination. In other words, most of the Arabs who have a say in the matter are willing to conclude peace with an Israel within its 1967 borders and willing to acknowledge Palestinian rights and national aspirations. This is the intent of United Nations Resolutions 242 and 338, universally accepted as foundations for a reasonable settlement.
The great majority of third-world countries have been vehement in their advocacy of equal rights for the Palestinian people. A clear indication of their sentiment lies in the fact that third-world countries that accept the PLO as the legitimate representative of the Palestinian people outnumber those that maintain diplomatic relations with Israel.
This also explains why the UN has conferred observer status on the PLO, even though it does not control territory and is not a government-in-exile.
European NATO allies have dissociated themselves from US Middle East policy by accepting the legitimacy of the Palestinian national movement and affirming the illegality of continued Israeli occupation of, and Jewish settlement in, the West Bank and Gaza. This position has been asseverated in various declarations and fairly consistently, including support for the recently adopted UN resolution deploring excessive Israeli military force in occupied territories.
In contrast, the US has been embarrassed enough by awkward circumstances to abstain from voting. Washington has had to part company with NATO allies in the UN by vetoing resolutions critical of Israeli policies.
Neither China nor the Soviet Union and its Warsaw Pact allies have ever questioned Israel's existence as a Jewish state or its right to live in peace and security. But they have rejected Israel's territorial ambitions and its refusal to accept the national character of the Palestinian resistance movement. The Soviets are not above fishing in troubled waters for political advantage. But they can be brought into the process if a viable peace proposal is put forward.
The Jewish state is clearly at an impasse, incapable of making admittedly hard choices, and seemingly unable to take the measure of its future. Opinion polls taken in Israel suggest that the country is as divided over the critical issues of war and peace as is the curious ``national unity'' government in office since 1984.
The Labor Party of Foreign Minister Shimon Peres wants to cut a deal with King Hussein of Jordan in the hope of exchanging part (but only part and - it hopes - the most heavily populated part) of the West Bank and Gaza for a peace treaty between the two countries while disregarding the PLO and all it represents. If carried out, this plan would amount to a joint and permanent Jordanian-Israeli control of the Palestinian people, a modified condominium to oversee the long-term obliteration of the Palestinian national identity. It is for no other reason that the PLO has been consistently dismissed as a terrorist organization by every Israeli government. Yet such a policy remains unacceptable to Prime Minister Yitzhak Shamir and his Likud Party. So wedded is the Likud leadership to the biblical notion of Eretz Israel that they would apparently prefer to torpedo the peace process than to relinquish control over the West Bank and Gaza.
There are, of course, Israelis who know better. Such organizations as the Peace Now Movement and the Progressive List for Peace are willing to give up the West Bank and Gaza - the two remaining portions of former Palestine still inhabited by overwhelming Palestinian majorities - as a price for peace. That is to say, they know that Palestinian nationalism is not about to go away, and they have consequently accepted the two-state solution, or the partition of the ancient land of Palestine into a Jewish state (Israel inside the ``green line'' or the 1967 borders, comprising roughly 80 percent) and a Palestinian state (the West Bank and Gaza, the remaining 20 percent). Unfortunately, none of these groups are in power.
It is in this context that the US can conceivably break the Gordian knot of Israeli-Palestinian politics. Over the years of the US-Israeli ``special relationship,'' the difference between dissimilar American and Israeli objectives became blurred, resulting in an unhealthy relationship with deleterious effects on the national interests of both countries.
As US standing and credibility in the Middle East suffered, Israeli security had to be defended by increasing oppression inside the occupied territories and skyrocketing military expenditure. The cumulative effect was a crisis of undefined relationships now at hand. Israel cannot decide because it does not have to, and no longer seems to know how to; and the US will not act because it is unwilling or incapable of doing so. In the meantime, US interests in the Middle East, and Israel's long-range security, not to mention the future of the Palestinian nation, hang in the balance.
The US must disengage itself from the morass of Israeli politics. Washington has to initiate rather than react. The US-Israeli relationship has to be defined and put in perspective. Israeli security can be defended by waging peace and without sacrificing important US objectives. Peace cannot be achieved by force outside the international consensus. It is now abundantly clear that the US can maintain its commitment to Israel within the 1967 borders, but can no longer tolerate and help sustain the continued occupation of the West Bank and Gaza. Sooner or later, the US has to draw a sharp distinction between defending Israel and suppressing Palestinian liberties.
Nabil M. Kaylani is professor of international relations at Rochester Institute of Technology, Rochester, N.Y.