When peace is water under the bridge

The Litani River, southern Lebanon - four Lebanese soldiers guard the bridge over the Litani. Beneath its concrete supports and below the wreckage of the iron railway bridge the Israelis destroyed in 1976, there froths one of the great rivers of antiquity, mentioned in the books of the Egyptian 19th Dynasty, known to the ancients as the Leontes, muddy and dark, wasting itself in the Mediterranean. Waste being the operative word.

In spring the Litani is a torrent, pouring through the valley below Beaufort Castle, sloshing through the front lines of Israeli occupation troops and Lebanese soldiers, racing through the orchards north of Tyre before exhausting itself in the sea. No wonder the Israelis watch this river with so much desire; no wonder the Lebanese army guards it so jealously. In any Middle East peace treaty, the name Litani will be almost as important as the signatures.

Already its flow and precipitation is being calculated by the nations that may benefit from its waters in the aftermath of peace. Lebanon produces 10 billion cubic metres of water a year, enough to satisfy threefold the total annual water deficiency of Syria, Jordan and Israel. Lebanese water, in the opinion of one of the country's economists, Marwan Iskandar, represents the single most important potential for technical co-operation between Arabs and Israelis if - if - their 45-year conflict comes to a formal end.

It is easy to identify the economic consequences of peace. Syria could sell oil and gas to Israel at world market prices, Israel could sell its agricultural technology to Syria, while a future Palestinian state - if that is what is to be born - may develop a fishing industry in Gaza linked to a new agricultural and industrial base in the West Bank, not to mention (as Israelis already know) a cheap labour market. The World Bank, Harvard University and the Massachusetts Institute of Technology are already working on plans for the co-operation of Israel with the three remaining frontline Arab states and a Palestinian 'entity'.

The optimism that drifts across from the peace talks in Washington - from the Israelis, Jordanians and Syrians rather than the Palestinians - may be illusory. Whatever concessions the Israelis appear to make in Washington, their army's repression in Gaza - and their previous covert assistance to the fundamentalists in an attempt to counter Yasser Arafat's influence - is fuelling a civil war between the Palestine Liberation Organisation and the Islamic resistance movement Hamas, a conflict that might provide a convincing excuse for refusing to leave the West Bank.

When Israel retreated from the Chouf mountains and then Sidon, its arming of both Christian and Druze militias produced just such a civil war in Lebanon. And without a Palestinian settlement, there will be no peace in the Middle East, no matter how many signatures are scribbled across a treaty.

Nevertheless, it may be time for all sides to look at the economic opportunities and disappointments peace would bring. For Israel, an end of the Arab boycott - which Israel claims has cost it more than dollars 40bn. For Palestinians, an end to oppression and the start of international Palestinian trade.

For Israel and Syria, a massive reduction in the military - 20 per cent of Israel's population is currently in the armed forces; 10 per cent of Syria's. The massive foreign debts of Israel (dollars 34bn), Syria (dollars 20bn) and Jordan (dollars 10bn) are largely defence costs. The United States will probably exercise its usual generosity by wiping out Israel's debt, and Syria may get away with repaying only half its bills to the former Soviet Union and Eastern Europe.

Israel could sell fruit and flowers to its Arab neighbours. Yet the entire agricultural balance of the region could be changed if Lebanese water were husbanded. According to Mr Iskandar, Lebanon could - with new dams and electricity generating stations and billions of dollars of investment - irrigate large areas of Syria, Israel and Jordan and provide itself, Syria and Israel with electrical power.

With a blindness typical of US policy towards the region in the mid-Eighties, the Center for Strategic and International Studies, a Washington think-tank, examined the Middle East's water resources but failed to include Lebanon, on the grounds that it had enough water and was anyway 'politically unsettled'. Needless to say, the study included Iraq, although Saddam Hussein was then waging war against Iran.

Syria's new tourist agreements with Lebanon - bus tours already take visitors from Beirut to the Roman ruins of Palmyra in Syria - could be extended to Jordan and on to the new Palestine and Israel. But Israel may find itself disappointed by the fruits of peace. It is unlikely to reap much benefit from the oil and gas industries when Western conglomerates control so much of the Gulf's resources.

Israeli banks could have difficulty competing with the big international Arab-Jewish bankers (who already demonstrate how well the two peoples can work together in finance). Textiles in Syria are cheaper than in Israel. Lebanese wine is incomparably better than Israeli wine. As Mr Iskandar points out, Israel produces the best surgical instruments and its competence in cut diamonds is undeniable. But who will want to buy its sophisticated weaponry?

There are suspicions, too, among the Arabs that the dimensions of 'peace' could be greater that any of them realise. A Syrian journalist, cynical enough to require anonymity, believes that post-peace development programmes would be regional rather than Arab-Israeli. 'You're going to find the Americans will want to bring in Turkey, their new policeman to the north. They want Turkey to control Iraq. Turkey controls the Tigris and Euphrates, which run into Syria and Iraq. Then Iran will want to be involved, politically if not economically. What will this mean?'

And who will want to invest in the Middle East if the gale force winds of the Islamic revival make the signatures on any peace treaty irrelevant? Lebanon, with its large Christian community and cosmopolitanism, may have ridden the Islamic storm successfully. Syria resolved it 'satisfactorily', in the words of the Syrian journalist, in the bloody 1982 repression of the Hamas rebels who wanted to turn Syria into an Islamic republic.

But is Jordan safe? Is 'Palestine'? And what about Egypt, whose earlier peace treaty yielded so few dividends? Will the Arabs who sign up for peace have to deal as ruthlessly with their Islamicists as Syria did?

Which raises the dark suspicion that if the Arab regimes at peace with Israel were 'de- Islamicised', there might be the makings of a future Arab-Israeli alliance. Who against but Iran? Is that what the 'peace' talks in Washington are leading to?