Peace and Politics

MIDDLE East peace negotiators have gathered again in Washington, a positive development in itself. The talks survive, though events distant from the peace table make progress difficult.

Peace went into eclipse last week, as Israel responded to attacks from Palestinian and Lebanese Shiite guerrillas by launching a quick thrust into southern Lebanon, breaking through lines set up by United Nations peacekeepers.

The outbreak of fighting was regrettable; it underscored the importance of the fragile peace effort.

For the next few months, at least, that effort will be hostage to Israeli politics. Movement on such issues as Palestinian autonomy is unlikely until after the June election pitting Prime Minister Yitzhak Shamir against the Labor Party's new standard-bearer, Yitzhak Rabin.

Mr. Rabin brings new electability to Labor. He's known for toughness, but is more open to the idea of Palestinian self-determination than Mr. Shamir and his Likud colleagues.

A critical issue in the Rabin-Shamir showdown will be Israel's request for $10 billion in loan guarantees from the United States. The Bush administration resolutely maintains the link between those loans and a halt to Israeli settlements in the West Bank and Gaza. Minus this stance, Washington's credibility as a mediator would dissolve in Arab eyes.

This week Secretary of State James Baker revealed the specific terms of the proposed US compromise on the loan-guarantee deal: To get the full $10 billion in guarantees over five years, Israel has to halt all settlement activity; to get smaller amounts over one-year periods, Israel has to agree to halt new construction, but can finish units already underway.

This marks the first time a US administration has unequivocably used financial aid as a lever to change Israeli policy.

Arab peace negoatiators praise the US stand. In Israel, reactions vary. Shamir this week reaffirmed his rejection of any form of settlement freeze. The Baker-Bush stance could, however, play into Rabin's hand, who is willing to restrict the settlements and wants to champion the cause of ill-housed and unemployed recent immigrants.