First, the Palestinian people should be congratulated. A situation that could have easily slipped into a fratricidal war has been turned around and a new unity government is in place. The alternative would have been a tragedy playing right into the hands of the Israeli government, which would have reveled in those divisions.

In response to the new cabinet, there are positive signals from the UN, Britain and the EU to the effect that sanctions crippling the Palestinian economy may be lifted.

The US and Israel are still predictably prevaricating, insisting Hamas must recognise the state of Israel, renounce violence and ratify previous agreements made between the Fatah-led Palestine National Authority and Israel.

In fact, Hamas has in the past offered Israel a 100-year ceasefire while, last weekend, the Palestinian Prime Minister Esmail Haniya called for Israel to return to its 1967 borders, a demand that constitutes de facto recognition.

There is no requirement for Israel to recognise Hamas, renounce violence or implement agreements it has signed, however. As usual the ones with the big guns and the fat wallets get to dictate the terms.

The second snippet of good news is that all 22 members of the Arab League are united in their backing for the revived Arab Peace Initiative that first saw the light of day during a 2002 Arab League Summit held in Beirut.

At that time, US President George W. Bush made a few polite noises when prodded by the Saudis, but the proposals were brushed aside by then Israeli Prime Minister Ariel Sharon.

As a result, what should have constituted an historic offer on the part of the entire Arab world was allowed to gather dust while all eyes were on Bush�s �Roadmap.�

In retrospect the so-called Roadmap was nothing more than bait to lure Arab nations on board the 2003 invasion of Iraq, which soon turned into a dead end.

On March 28, the Arab League will convene in Saudi Arabia with the Arab Peace Initiative atop its agenda.

As the initiative stands, it offers Arab normalisation of relations with Israel in return for Israel�s withdrawal behind its 1967 borders and the creation of a Palestinian state with East Jerusalem as its capital.

It further enshrines the Palestinian right of return as outlined in United Nations General Assembly Resolution 194. And therein lies the crux of the problem.

Israel wants this condition removed from the text as it fears an influx of Palestinians waving the deeds or brandishing the keys to their former homes would cause a demographic imbalance threatening the Jewish state.

For their part the Palestinians are just as adamant that the stipulation remains. This issue was a major stumbling block in the 2000 Clinton-brokered peace talks between Ehud Barak and Arafat and in the end it was postponed for serious discussion during planned final status talks that never materialised.

There has been far too much Palestinian blood under the bridge for the right of return to be waived.

In practice, it�s doubtful that Palestinians would be queuing up to move to Israel proper. Many are now prosperous citizens of other countries. Others would opt to live in the new state of Palestine. Most are simply asking for their rights to visit relatives and friends and for equitable compensation. Under the initiative, Israel would also have to dismantle its large West Bank colonies, such as Ariel and Maale Adumim, once blessed by George Bush as �new realities on the ground.�

Other realities

But there are other realities that should take precedence over the preferences of fewer than 100,000 colonists. The future of the entire Middle East is at stake. Israel must decide whether it is ready to settle for endless war or whether it is prepared to make sacrifices for eternal peace and security.

Writing in Ha�aretz, Zvi Bar�el condemned Israel�s reception of the initiative.

�Israel, on its part, has so far treated the document as if it were itself a hostile state or, more precisely, a terror organisation,� he writes. �But in recent weeks, it has turned out to be an Israeli political asset, because it opens a new path of escape.�

Bar�el believes that in tried and true fashion Israel has no intent of conducting actual negotiations.

�We only need to find someone to blame for blocking the negotiations,� he says, adding, �In honour of this trick, �the Arab world� is suddenly the partner. And it is an excellent partner, because if it does not agree to change its positions, �it� -- and not Israel -- will be responsible for the continued freeze.�

The problem is even if the Arab League and the Palestinians were prepared to make concessions in favour of Israel, there are still no guarantees that Israel will take the offer seriously.

Perhaps Israel has learned to live in a perpetual state of war and feels comfortable portraying itself as a chronic victim. Then again, instead of being master of its own destiny it may be nothing more than a marionette dancing to a discordant tune composed in Washington and played by a neocon band.