Any peace deal in the Middle East must include extremists on both sides

Having gambled with the peace process and almost lost it, Ehud Barak, Yasser Arafat and Bill Clinton meet today in Egypt to get it back on track. If they are to succeed, they will need to revive the contract at its heart: the Palestinian sense of injustice must be eased as the Israeli sense of insecurity is calmed.

Having gambled with the peace process and almost lost it, Ehud Barak, Yasser Arafat and Bill Clinton meet today in Egypt to get it back on track. If they are to succeed, they will need to revive the contract at its heart: the Palestinian sense of injustice must be eased as the Israeli sense of insecurity is calmed.

This process has never been about sentimental visions of a future world where Arab and Jew might walk together in friendship - which at the moment is just as well. Nor has it ever been the preferred approach for either side. The Palestinians would have preferred to regain their homeland on the backs of victorious Arab armies. But Israel was an established power and not to be dislodged. The Israelis would have preferred to hold on to West Bank and Gaza, the territories occupied during the 1967 war, on their own terms. But the Palestinian intifada of the late 1980s had made them aware of their inability to police the occupied territories.

So the deal forged at Oslo and backed by Clinton was that a Palestinian Authority would be granted progressive control over the occupied territories, culminating perhaps in the full transfer of sovereignty, so long as it kept the fanatics, mainly Hamas, in check. The process would be gradual, with an accumulation of mutual confidence at each stage to take the process on to the next.

Mutual confidence, however, remained in short supply. Arafat clamped down on local militants, but every terrorist attack meant that Israelis remained insecure. This led them to reduce the physical interaction between the two communities, and so the ability of the Palestinians to benefit from the strength of the Israeli economy.

By this summer, gradualism was becoming more difficult. Arafat was threatening to force the pace by declaring an independent Palestinian state in September. In Israel the Labour government, led by Ehud Barak, was prepared to rise to the challenge. He had cast himself as Rabin's worthy successor, a man who would reach the final settlements with the Lebanese, the Syrians and the Palestinians.

President Bill Clinton also saw merit in trying to move the whole process to closure and hosted an extended summit at Camp David in July. Unfortunately the agenda was too large and the preparation inadequate. Even so, it made remarkable progress. Barak offered substantial compromises on the sharing of sovereignty over Jerusalem, which led his more hawkish coalition partners to desert him. But Arafat could not accept a deal that, however realistic, required him to sign away many Palestinian dreams. A specific sticking point was Temple Mount, the Islamic holy site.

After this failure, the situation seemed difficult but not dire. Arafat held back on announcing a Palestinian state. But his frustration was not helped by the Americans blaming him for missing a historic opportunity, and not even putting in a counter-offer. He had lost the moral high ground. The Israelis now believe that Arafat decided that the only way he could take the issue further would be to create a crisis, to provide a display of Palestinian anger that would convince the Israelis that they dare not be too stubborn. It is the nature of Jewish-Palestinian relations that a pretext would be provided soon enough.

This was the background to the recent cycle of violence: Likud leader Ariel Sharon making his point about the sovereignty of Temple Mount in a knowingly provocative manner; the Israeli army responding to rioting with excessive firepower, creating a succession of martyrs; Palestinian passions running so high that any Israeli target of opportunity, be it a tomb, a rabbi or three hapless soldiers, attacked without inhibition; the bombing of Ramallah.

Arafat is now discredited in Israeli eyes as a partner in peace. Either he is in control of the Palestinian Territories, in which case he is culpable of fomenting an insurrection as a crude negotiating ploy, or else he is not, and so cannot deliver on any agreement reached. Barak is discredited in Palestinian eyes. He is blamed for their dead and now seems ready to harden rather than soften his line, an unavoidable consequence of bringing Sharon into a government of national emergency.

The harsh strategic realities behind this process have not changed. Any Israeli attempt to impose martial law throughout the occupied territories will fail. It cannot regain control of the streets through helicopter gunships, and the Israeli Defence Force simply lacks the manpower. It would risk the further spread of inter-communal violence into Israel, and the loss of what has already been achieved with Egypt and Jordan as well as with the Palestinians.

The readiness of young Palestinians to face superior firepower may have shocked Israelis, confident that a display of force can always control a crowd in uproar, but Arafat must also be aware that the excitement on the streets can soon give way again to a sense of despair with little to show for all the carnage. He can declare an independent state, and gain a degree of recognition, but without dialogue he cannot gain effective control or improve the condition of his people.

Both Barak and Arafat, weakened as they are, still understand these harsh realities. If they want to negotiate, imaginative ideas are being canvassed on the sticking points - for example putting Temple Mount under UN, or even divine, sovereignty. It is important not to forget how much has been agreed. But trust has been lost and the leaders are obliged to sound tough.

This creates a real danger for today's summit. It will be an achievement if it manages to persuade the Israelis to lift the current state of siege in return for a Palestinian promise of restraint. But Hamas may not be a party to any promise, and there are many opportunities for independent extremist action, including retaliatory terrorism. Within the West Bank, many of the Jewish settlements are barely defensible. Moreover, Clinton is a lame-duck president, who has been outplayed by Kofi Annan in the recent crisis management and brings remarkably little to the table.

If restraint takes hold, diplomacy cannot continue as if nothing has happened. Time is needed to digest the lessons of these terrible events. As an alternative to a prolonged and divisive Israeli general election, it may even be better if Sharon was brought back into government, even though this a man with few equals in the counter-productive use of armed force. The point is only that more sections of both communities need to be drawn into the peace process if it is to be rebuilt from the ground rather than just proclaimed from summits. At the moment it seems a ludicrous proposition, but the best deal would be one sealed by Sharon and embraced by Hamas.

The writer is professor of War Studies at King's College London