Hopes for Mideast Peace

THE Palestinian Authority has been in existence for nearly a year, but the peace process it embodies seems more tenuous than ever. Extremists on both sides of the Middle East's central conflict have seized the agenda, making the the famous handshake in Washington a distant memory.

If hope is to be rekindled, all parties to the peace process will have to inject fresh energy into their efforts, and take some risks.

Israel's government, under Prime Minister Yitzhak Rabin, has to show a willingness to moderate the most inflammatory aspect of its policy: continued support for, and even expansion of, Jewish settlements in the occupied West Bank. Instead of allowing new land annexations and building, the Rabin government should draw the line on new settlements and weigh plans for repositioning Israeli enclaves, thus clearing the way for Palestinian control.

Such a stance would be politically hazardous, but Mr. Rabin already faces an intense challenge from the Israeli right, and a permissive position on the settlements, together with a renewed ''iron fist'' against Palestinian radicals, may only play into his opponents' strengths.

Rabin deserves credit for getting the peace process going and for pursuing a military pullback. As he has asked, what real alternative is there to keeping the process going? Another half century of murderous conflict?

On the Palestinian side, there's no less a need for unequivocal orientation toward peace and peaceful development. The authority, under Yasser Arafat, has taken steps to crack down on the radicalism that spawns suicide bombers. Equally as important are measures to lay a democratic political groundwork among Palestinians. Here Mr. Arafat falls short, retreating into insulated, autocratic leadership.

Unless the grass-roots political energies in Gaza and the West Bank are directed toward nation building and peaceful protest, militancy is likely to deepen -- and crucial investment and financial support will be driven even further away.

Finally, the international donors who have pledged support for the Palestinian Authority should be more forthcoming. Tight as aid money is, it will be better spent now than in the aftermath of renewed conflict. And the chief patron of Middle East peace, the US, should rediscover its role as a mediator committed to prodding both sides toward progress.

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