What is the Jewish state for?

Part One: West Bank Six teenage Israeli soldiers, rifles propped across their laps, are sitting in the dust, eating choc ices. Beside them is a rambling, ancient building, which is part mosque, part synagogue. According to the Book of Genesis, Chapter 23, a cave beneath the building is the burial place of Abraham, patriarch of Judaism and also of Islam. Here also rest Abraham's wife Sarah and their son Isaac and his wife Rebecca.

A sleepy menace fills the air. Jews are forbidden by the Israeli army to enter the back of the building, which is a mosque; Muslims are forbidden to enter the front, which is a synagogue. Only "Christians" (short-hand for everyone else) are allowed to visit both. The crumbling streets are deserted save for Israeli paratroopers and groups of children. A gang of Palestinian kids chat to a grinning Israeli soldier; two Jewish kids play on tricycles. The children, who ignore each other, look startlingly similar. They can be told apart only by the small knitted kipas which the Jewish youngsters wear. In this place, at this time, it is reasonable to assume that their parents might cheerfully kill each other.

This is Hebron, the third most holy town in the Holy Land, and the only large Palestinian town on the West Bank still under Israeli control. In the next couple of days - maybe as soon as today - Hebron will provide the first real clue to the intentions of the new Israeli government of Binyamin "Bibi" Netanyahu.

It was here, at the Tomb of the Patriarchs in December 1994, that a Jewish settler, Baruch Goldstein, murdered 29 Muslim pilgrims at prayer. It was here that Yigal Amir, the man who murdered Prime Minister Yitzhak Rabin in November last year, spent most of his weekends, praying with a group of 200 biblically inspired Israeli extremists who insist on living in the heart of an otherwise wholly Palestinian town. Why they do is because it was also here that an entire Jewish community was massacred by Arabs in 1929.

Equally, Hebron is regarded as one of the principle strongholds of Hamas, the Islamic movement behind the suicide bombings of Israeli cities in February and March which help to explain - but do not wholly explain - the defeat last month of Mr Rabin's successor, Shimon Peres.

When Mr Netanyahu meets President Clinton in Washington today, Hebron will be at the top of the agenda. Under the terms of the second Oslo agreement between Israelis and Palestinians, the Israeli Defence Force (IDF) was supposed to have "redeployed" in March, remaining only in the town centre to defend the small, aggressive Jewish community there. The transfer was postponed by the Hamas bombings and again by the Israeli elections.

During his campaign, candidate Netanyahu, prospecting for votes on the religious right, said he might delay the redeployment in Hebron indefinitely. To do so would be a clear signal that he intends to adopt a confrontational approach with the Palestinians (and the US) which would, in effect, bury the peace process.

On the other hand, if he tells President Clinton today that Israeli troops will shortly leave most of Hebron, Netanyahu will be hailed in the West as a pragmatist, prepared to keep the peace process on track to who knows where.

Which is it to be? Perhaps neither. The word is that the IDF is already packing up and leaving purely Palestinian areas. However, to cover his domestic right flank, Netanyahu is expected to strengthen (at least cosmetically) the IDF grip on the town centre. The West - even the Palestinian leadership - may accept this fudge with relief. But local Palestinian leaders forecast trouble.

Hebron encapsulates not only the convoluted and bloody history of this part of the Middle East but also its muddled, and hazardous, immediate future. Dozens of conversations in the past eight days across Israel, Golan and the West Bank with politicians, officials, soldiers and citizens leave the mind reeling with an overload of categorical (and mutually conflicting) certainties.

But here is a working hypothesis: there will be no frontal assault on the peace process by Bibi Netanyahu. He will try to muddle his way for at least a year without a clear idea of what he is muddling towards. It is a commonplace among Israelis - even those who voted for him - to complain: "Who is Bibi Netanyahu? No one knows." In this, if in nothing else, Mr Netanyahu is a man perfectly matched to the moment. Israel is going through an identity crisis more wrenching than any in its brief history.

Part Two: Jerusalem, Golan and Tel Aviv Any course in "the Middle East for beginners" should include 10 minutes among the tribes of modern Israel at the Jerusalem central bus station. A young woman sells pirated rock 'n' roll CDs; two ultra-Orthodox young men in dark suits and broad-brimmed black hats shove each other for a seat on the bus; a black (Ethiopian) Israeli serves kosher sandwiches to an impatient queue wearing a selection of black hats and baseball caps.

Last month's election, the most important in Israeli history, was shaped as much by questions Israelis asked of, and about, themselves: Who are we? Why are we here? Do we want to become a "normal" Western state? Or do we want to create something uniquely Jewish? What are Jewish values?

To this should be added a related question, which Israelis tend not to ask: Would a renewed emphasis on Jewishness - something promised by Mr Netanyahu - make peace with the Arabs easier or more difficult?

Ilit Eitam is a farmer on the Golan Heights, mother of seven, and wife of a general. "What does it mean to be a Jew in a Jewish state," she asks, "if you end up living in a little America? Why do we take all this heavy stuff on ourselves [she waves towards the bookshelves full of Hebrew texts] when our children say they want to be American? Eighty per cent of young people in Israel don't know the Ten Commandments. That's the problem we have. We have to make the life of our children meaningful. In the Jewish way. Jewish values. A Jewish life."

The battles within Israeli society are sometimes presented as a struggle between secular liberals and religious conservatives. Such a struggle does exist and sometimes turns violent. In Jerusalem last weekend 3,000 black-hatted Hasidic Jews hurled stones and insults at police in an attempt to close a major city thoroughfare that they insist should be closed on Shabat (the sabbath). But strongly religious Jews are not the only ones to survey Israel today and to feel a sense of bewilderment.

A very senior Labour figure, speaking off the record, said his party - although well-known to be a bastion of secular Israel - lost the election partly because it trampled unnecessarily on the sensitivities of such people (Israel's silent majority). "We came over for the first time as anti-religious, rather than secular but tolerant."

The fundamental argument - sometimes raging within individual Israelis - is between Israel as a chosen country and Israel as a normal country. With prosperity surging in the quasi-peace of the past three years, "normality" is tempting to many non- or semi-religious Israelis but also alarming.

Many, but not all, religious Jews take a hard line in the Palestinian debate (which is also in a sense about normalising Israel's relations with its enemy-neighbours). Many, but not all, secular-leaning Israelis are inclined to take a risk on peace.

Part Three: Jericho, Tel Aviv, Hebron In the Jordan Valley, between Jericho and the Dead Sea, there is a little barbed wire compound flying two flags: the blue and white of Israel and the red, green, white and black flag of Palestine. In the blinding heat (somewhere in the mid 90s Fahrenheit), a little ceremony is being enacted: Israeli solidiers and Palestinian police are about to set out on a joint patrol through Jericho. Israeli soldiers live on one side of the base; Palestinian "police" (many of them former PLO "freedom fighters" from Iraq or Tunisia) on the other. Between the two, a barbed-wire fence provides a neat emblem of the ambiguous condition of Israeli-Palestinian relations.

Captain Fuad Rajih, a Palestinian officer is asked whether it is humiliating to serve alongside his former enemies. He replies cryptically, quoting Shimon Peres: "Peace is made between enemies, not between friends."

Just before we leave, another Palestinian officer discovers that our Arabic-speaking travelling companion was born in Baghdad. He asks him, when no one else is listening, what he thinks of the situation there. Our companion, mischievously and untruthfully, says that he is a strong supporter of Saddam. The officer, who had been backslapping with the Israelis two minutes before, beams and says: "God bless you, sir."

Such talk is commonplace between Palestinians in private, including, it is said, Yasser Arafat. If you believe the peace process is a sham, or doomed to fail, here is your proof. But many senior pro-peace Israeli politicians and officials insist that it proves nothing.

Ehud Baraq is a former head of the Israeli armed forces, and the man most likely to succeed Shimon Peres next year as leader of the Labour party. Speaking in his temporary office in Tel Aviv, he says he has no doubt that Arafat and some of those around him still nurse hopes of dismantling the Jewish state. "This is the dream, but so what? He has a right to dream. It will lead him nowhere."

The reality, says Mr Baraq (one of the most hard-beaked Labour hawks) is that Arafat recognises that he must deal with Israel to preserve his own power and influence from the Islamist challenge of Hamas.

The only way to "alter the dynamics" of the Middle East, he says, is for Israel to take a "calculated risk" to satisfy legitimate Palestinian demands and hope that Palestinian, and other Arab, attitudes are changed by economic and social benefits of the peace.

Israel, he says, can afford to take a risk. "We are too strong, militarily and economically, to be removed from the Middle East and the Arabs now know that. Some people in Likud will not accept that. They have a shtetel [ghetto] state of mind which must feel itself constantly threatened by enemies all around.

"Netanyahu has a dilemma: whether to go ahead with his election slogans and the traditional postures of Likud and inevitably break his head on the political realities of the Middle East or to pull into the centre and go along with the broad lines of our policies. I am fully confident, knowing the personality, that he will go the second way."

But, as Ehud Baraq says, Netanyahu has in effect handed Hamas a veto over the peace process. Even if he does keep the show on the road, it is entirely unclear where he is prepared to go in the talks on the "final status" of the Palestinian state-in-embryo.

Yoissi Alpher, a former Mossad (Israeli intelligence) executive, who was involved in the private negotiations that led eventually to the Oslo agreement, puts it this way: "In a worst-case scenario, the process could fall apart on any number of short-term problems or a resurgence of Hamas terror. In a best-case scenario, we are looking one year from now at a major crisis in the final status negotiations."

Then what? Of the many election promises Netanyahu made, there is maybe only one really dear to his heart: his promise to bring Reagan-Thatcherism to Israel and create a new economic golden age. The existing boom in foreign investment in Israel depends entirely on peace; a collapse in the negotiations with the Palestinians could turn Bibi's golden age to lead.

There are some politicians and commentators who believe that, rather than allow this to happen, Netanyahu will ditch some of the religious and rightist parts of his coalition, and seek a grand coalition with Labour. But to do so would bring him head-on into collision with that other great explosive question of Israeli politics: what is the Jewish state for? Peace and prosperity might be adequate answers in almost any other country. Not in Israel.