WASHINGTON'S official halls and board rooms are filled with dealmakers these days, as the Bush administration tries to reach agreements on a national economic recovery plan and a Middle East peace.But on both the domestic and international levels, conciliation remains the greatest challenge for negotiators; peace and prosperity are elusive goals. From the Democrats, President Bush calls for a truce in the increasingly bitter partisan war over who's to blame for the ailing United States economy. As the presidential election year approaches, Bush's declining popularity among voters is commensurate with the sharp drop in consumer confidence in the economy. And the president is embattled by opponents who say Americans are fed up with the lack of leadership. Special House Ways and Means Committee hearings have produced little more than acrimonious debate. Bush's primary economic advisers - Treasury Secretary Nicholas Brady, budget director Richard Darman, and chairman of the President's Council of Economic Advisers Michael Boskin - all appearing before the committee, quickly reminded the legislators that if Bush could have charted the economy's course without the waves of congressional opposition, US consumers, producers, and labor would all be better off to day. House majority leader Richard Gephardt (D) of Missouri responded with a two-hour blast of White House incompetence. His tirade was followed by dozens of other congressmen offering their own separate remedies. Barbs and "I-told-you-sos" dominated the exchange; constructive comments were lost in their caustic delivery. Robert Shapiro, chief economist for the Progressive Policy Institute, a Democratic think tank, doubts whether Bush and his Democratic foes will respond quickly and produce a bipartisan plan addressing the country's urgent economic needs. He laughs when asked about a coordinated Democratic response: "As if the Democrats agree on anything," he says. Bush bashing is now a favored congressional pastime. It's a strong departure from the respect he was accorded on Capitol Hill - a standing ovation, no less - during his leadership in the Gulf crisis earlier this year. More comfortable winning battles abroad than fighting them at home, Bush is still trying to draw on his reservoir of international respect. While pushing for bilateral talks here this week between Israel and her Arab neighbors, White House negotiators are also quietly promoting economic links between the region's feuding parties as one way to forge a practical peace. The strategy, as explained by a European Community official who is here in mid-December to observe the Arab-Israeli talks, would involve US, European, and Japanese investments in projects such as ports, electrical grids, and free trade zones in the region. The prospect of strong financial and commercial ties in the region could be a stabilizing factor. Cash-strapped Syria and Jordan, for example, are desperate for added investments and markets. Israel, virtually isolated among 22 Arab states, could join a Palestinian-ruled West Bank and Jordan in an economic zone designed to move labor, money, and goods freely. This would enrich the three economies and open them up to greater regional participation. But getting the dueling parties to see beyond existing security problems, border disputes and autonomy issues is a no easy task. The first crucial step is to build confidence among negotiators, says Georgetown University government Prof. Robert Lieber, an adviser to presidential hopeful Gov. Bill Clinton and a specialist on Middle East affairs. Washington's politicians and Middle East guests can start the process in their respective arenas by extending their hands instead of pointing their fingers.