IF the Gulf crisis has made a solution to the Israeli-Palestinian conflict more urgent, it may also make it more difficult to achieve. Feeling that Israel is isolated and more vulnerable because of the Gulf crisis, Israeli government sources say any solution to the Palestinian problem will now have to be implemented in the context of a settlement of the broader Arab-Israeli conflict.
Israel is not formally linking the two issues by demanding Arab recognition as a precondition to movement on the peace process, these Israeli sources insist. But, they say, security concerns produced by the Gulf crisis will make it harder for Israel to advance the peace process unless key Arab countries end their 40-year state of war with Israel.
While not an insurmountable obstacle, many analysts say, connecting the two issues could make getting to the bargaining table harder than ever.
``There is a linkage here,'' says one Israeli diplomat. ``We can't proceed with the Palestinians without simultaneously proceeding with the Arab states.''
A source in Jerusalem elaborates: ``It's not a precondition that we won't make peace with the Palestinians unless the Arab states make peace with Israel. But we see it as a simultaneous process. In our book it is a whole package. We think the Americans understand it as a whole.''
One US official acknowledges, ``The State Department understands better [as a result of the Gulf crisis] the need to nudge the Arabs to recognize Israel if the peace process is going to move forward.''
Israeli security fears have been heightened by Iraqi threats to use chemical weapons against Israel and by the transfer of high-technology Western arms to Arab states allied with the US in the Gulf but opposed to Israel.
The potential threat such shipments pose to Israeli military supremacy in the region, Israeli sources say, is another reason why Israel believes it cannot take risks for peace on the Palestinian issue without defusing the threat of war from Arab states.
``From Israel's point of view there is a decided shift in the balance of power. It will have to be taken into account,'' says the source in Jerusalem. ``There will be no problem during the preliminary stages of the peace process. But we will be guarded about going too far unless we have the reassurance that comes with the normalization of relations [with key Arab states].''
Despite the shipment of sophisticated weapons to Arab states like Saudi Arabia, Israel holds a monopoly on nuclear weapons in the region. Iraq could have a crude nuclear capability within two years, perhaps one, according to some estimates.
Under pressure from the US, Israel issued a four-point peace proposal in May, 1989, calling for elections in the West Bank and Gaza Strip to select Palestinians to negotiate with Israel over the future of the two occupied territories.
Another point, largely eclipsed by the focus on the election plan, called on Arab countries to end the state of war that has existed since the Jewish state was created in 1948.
Peace efforts foundered last spring after Israel refused to accept Secretary of State James Baker III's five-point plan to get an Israeli-Palestinian dialogue started in Cairo.
The US has refused to link settlement of the Palestinian issue to Iraq's withdrawal from Kuwait, as Iraqi leader Saddam Hussein has demanded. But there are growing indications that once the Gulf crisis is over, Washington will turn to the Palestinian problem, more convinced than ever that no permanent Middle East peace can be attained without solving it.
``The Americans are urging us in the remaining weeks or months of the Gulf crisis to think about creative ideas on how to move things forward,'' notes the Israeli diplomat.
A succession of Israeli governments has called on Arab states to normalize relations with Israel. But partly because of Israel's occupation of the territories, only Egypt and the PLO have recognized the Jewish state.
The PLO's recent tilt toward Iraq will make Israel even more determined to exclude the organization from the peace process. The radicalization produced by the Gulf crisis could also make it harder for Israel to find acceptable interlocutors among Palestinians living in the occupied territories.
On the other hand, three factors could give peace prospects a boost after the Gulf crisis is ended: an even greater worldwide determination to see the Israeli-Palestinian issue finally resolved; the emergence of a dominant, potentially moderate Arab coalition led by Egypt, Saudi Arabia, and Syria; a more energetic US role in finding a diplomatic solution.
Israel has long rejected the idea of turning the Palestinian issue over to the kind of international Middle East peace conference long sought by Arab states.
But Israeli officials say the idea of direct talks between the parties to the conflict, under a superpower umbrella, is gaining acceptability in Israel, whose relations with the Soviet Union are fast improving.
In talks last week between Israeli prime minister Yitzhak Shamir and former Soviet foreign minister Eduard A. Shevardnadze, the Soviets dropped their demand for Israeli acceptance of an international conference as a condition for resuming relations with Israel. Israeli officials say the resumption of full diplomatic relations between Jerusalem and Moscow, severed in 1967, is now only ``a matter of time.''
Restored relations would strengthen the likelihood that the US and Soviet Union, and not the permament members of the UN Security Council, would provide the auspices for a future peace conference.
If ties between Israel and the Soviet Union are restored, Moscow could well become the principal broker in arranging peace talks between Israel and Arab parties to the conflict, since the Soviet Union is on better terms than the US with the PLO and important Arab states like Syria.
Israeli officials say it is remotely possible that the Gulf crisis could resurrect Jordan's role in the peace process. The so-called ``Jordanian option'' of bringing Palestinians to the bargaining table through a Jordanian-Palestinian delegation was pronounced dead in August 1988, after King Hussein withdrew from the affairs of the West Bank, which Jordan once controlled.
But with the credibility of the PLO in tatters and relations between Palestinians and Jordanians enhanced as a result of the Gulf crisis, King Hussein could once again become an acceptable partner for West Bank and Gaza Palestinians.
``If the King wants to restore his position after the crisis,'' says the Israeli diplomat, ``he might seek such a role. This would be a way to become a respectable member of the club again.''
On another issue, the Israeli official said his country is receptive to a proposal, made by Shevardnadze last week, to make the Middle East a nuclear- and chemical-weapons free zone. But he said Israel's precondition is recognition by Arab states.
``To free the Middle East of nuclear weapons would be putting the carriage before the horse if it was done before there was peace between the Israelis and Arabs,'' the diplomat said.