Equation for Mideast Peace Changes Once Again

After his release from an Israeli jail, the spiritual leader of Hamas, Sheikh Ahmed Yassin, appears to have extended an olive branch to his sworn enemy by offering a cease-fire.

His proposal appears to take advantage of a resurgence of popularity for his Islamic Palestinian movement.

But Sheikh Yassin heavily qualified his Oct. 7 statement by saying that he would declare a truce only if Israel withdrew completely from the West Bank and Gaza and removed all Jewish settlements.

His declarations follow recent shifts in the delicate Mideast balance of power. These stem from Israel's failed assassination attempt in Jordan on the life of a another leader of Hamas, the militant Islamic group responsible for recent suicide bombings in Jerusalem.

Hamas enjoyed its most public "triumph" in years on Oct. 6, with the tumultuous welcome in Gaza for Yassin. He was released from prison as part of a deal with Jordan to hand over two agents of Mossad, the Israeli equivalent of the CIA, involved in the attack.

A day after his Gaza arrival, Yassin added that Islam rules out a "permanent reconciliation," and other Hamas leaders suggested that any cease-fire would only be a step toward "liberating" all territory, including Israel proper. But even as the sheikh toyed with such conditions, Israeli Prime Minister Benjamin Netanyahu made clear that Israel would "continue its fight against terrorism, and not be deterred," in pursuing this "just aim everywhere."

"This [statement] is going to put more focus on the Palestinian Authority, [President Yasser] Arafat, and Hamas, that if there is a further round of terrorism, Israel will react," says Gerald Steinberg, a military expert with the BESA center at Bar-Ilan University near Tel Aviv.

"Next time Israel won't quietly send secret agents with poison darts," he says. "It will be a much more visible, military response."

Since the Israeli assassination attempt on Jordanian soil, horse trading between the two countries has been carried out in time-honored Mideast fashion: negative, "illegal," and unsavory acts are mutually cancelled out.

Israel won the freedom of its two arrested Mossad agents and three other Mossad fugitives holed up in the Israeli Embassy in Amman, but the price was high. Sheikh Yassin's release was the first Israeli gift to Jordan's King Hussein, who negotiated the deal, then some 20 Jordanians held in Israeli jails were freed.

They will be followed by up to 50 Palestinian detainees, though Israeli Infrastructure Minister Ariel Sharon said that those let go will "not be members of Hamas and do not have Israeli blood on their hands."

Mr. Netanyahu's tough response - despite Mossad's bungling, which he said "damaged" close relations with Israel's only close Arab friend, Jordan - is likely to further polarize Mideast actors engaged in the flagging peace process.

American envoy Dennis Ross arrived in the region Oct. 6 to relaunch peace talks, but his mission was overshadowed by the spy-vs.-spy scandal that has mesmerized the region.

Among the primary adjustments to the Mideast line-up:

*The failed Sept. 24 assassination attempt on Khaled Meshal, the Hamas politburo chief, has been a political windfall for Hamas, which rejects the peace process and advocates the violent erasure of Israel's existence.

Tens of thousands of Palestinians turned out to greet the ailing sheikh in the Gaza Strip. His return now poses a challenge to Mr. Arafat's popularity.

"We tell the whole world that we are peace-seekers," Sheikh Yassin says. But his demands, such as the return home of millions of Palestinians now in exile, mean that Israel will not accept such a peace.

* In a combative mood, Netanyahu on Oct. 6 strongly defended Israel's "right" to "fight terrorists everywhere," declaring that no country would be a "safe haven."

"In this struggle, there are bound to be successes and some failures," he said in Hebrew, using the word "terrorism" dozens of times during a press conference.

"We view it as our right to defend ourselves. We did the right thing [in Jordan] for the right reasons," he said. "This is a total war in which there can be no compromise

* Though both Israel and the United States accuse Arafat of maintaining a "revolving door" policy regarding Hamas activists - cracking down with arrests, then releasing them for political reasons - Israel's own release of Yassin and other prisoners appears to put Israel in the same boat.

Israel and the US have required Arafat to destroy the Hamas "terrorist infrastructure" as a condition of restarting full peace talks, so the new Israeli release sends mixed signals to the Palestinian leader.

* Sheikh Yassin's release to Jordan is seen as a slap in the face to Arafat, who has called for such a move since the sheikh was jailed for life in 1989. Though Yassin has been seen as a moderate leader, he will provide Palestinians with a spiritual and moral authority separate from Arafat.

* King Hussein has come out on top of the fray, through careful maneuvering that has won quiet kudos from the US, Israel, and Hamas. Despite dissent at home over Jordan's 1994 peace deal with Israel, it enabled the king to save Mr. Meshal's life and orchestrate the Mossad-sheikh-prisoner swap.

"Israel has been backstabbing Jordan, and the attack was arrogant and clumsy," says Mustafa Hamarneh, director of the Center for Strategic Studies at the University of Jordan in Amman. "But the king's policy has worked:

Jordan is clearly engaged, and Israel is on the defensive."

* Once deemed invincible, Mossad's reputation has plunged. Netanyahu is reported to have overruled objections from the Mossad chief and insisted on ordering the attack.

"The botched assassination attempt ... has caused the country serious strategic damage," wrote Zeev Schiff, one of Israel's most respected military commentators, in Haaretz newspaper. "The failure will encourage acts of terror against Israel and will further diminish the Palestinian Authority's readiness to cooperate in the war against Hamas."

* Furious that forged Canadian passports were used by Mossad agents posing as foreign tourists - the third known use of Canadian documents in Mossad hit-squad missions - Canada has recalled its ambassador from Tel Aviv.

And sympathetic as the American administration is to Israel's security needs, President Clinton noted that US policy for two decades has been that "we do not engage in assassinations."

Despite the low-profile reaction from Jordanian officials, the local press has been scathing: "Netanyahu tried to export terrorism to a friendly country, [and showed] that he could not be trusted with the fate of the peace process," the Jordan Times said in an editorial. "Netanyahu has revealed all the cards up his sleeves. These are cards with which no one can play. With Netanyahu, there can simply be no game to play."