The refugee problem is stuck like a bone in everyone's throat

America's decision to keep its contacts with some members of the Palestinian new government didn't come as big surprise to Israel. In my weekend print edition column (with Aluf Benn) the first paragraphs were dedicated to developments in the Arab-Israeli arena (the other part of the column dealt with Israel's position in regard to the war in Iraq).

The Arab League's peace plan, Secretary Rice and Foreign Minister Tzipi Livni have agreed, is nothing more than a position. The Arabs are not a mediator in the conflict, but rather a side. This is their position; Israel has a different position. Livni believes that it is good that Israel's position is on the table. That the Arabs can mediate among themselves if they want to change the initiative in order to transform it into a possible basis for discussion.

Only the chances for that aren't looking good at the moment, at least not in the short term: Israel is demanding the removal from the discussion of the Arab peace initiative's refugee article, which hints at "the right of return." Egypt, Syria and Saudi Arabia have already announced that changes are out of the question. The Americans are trying to mediate, even though Rice explained on Wednesday that she has not asked anyone to make changes in the initiative: Deputy Defense Minister Ephraim Sneh met quite by chance with the Saudi Ambassador to Washington Adel Al-Jubeir in Assistant Secretary of State for Near East Affairs David Welch's corridor. Welch himself visited Riyadh this week the day before Livni's visit to his boss.

The fact of the matter, says a senior Israeli official, is that it is necessary to welcome the idea inherent in the Saudi initiative, that the Arab world is prepared to accept Israel. However, the refugee problem is stuck like a bone in everyone's throat. Israel will not agree to absorb even a single refugee in its territory, but the Arab League cannot concede on this issue, which is most sacred to the Palestinians. What Livni did this week, and which Rice echoed to some extent in her remarks after their meeting, was to propose to the leaders that they reverse the order. Instead of waiting with the normalization for Israeli-Palestinian peace - normalize now, and thus help advance the peace process. Rice said that there is a "clear need for an Israeli-Arab reconciliation to accompany... the resolution of the Israeli-Palestinian conflict." Note that she said "to accompany" - that is, there is not necessarily a need to wait for it to come only afterwards.

On Sunday of this week, Prime Minister Ehud Olmert surprised the people of his bureau, when they convened prior to the government meeting. He told them that he intended to open the meeting, during the part to which media are admitted, with a positive statement about the Saudi initiative. A short discussion of the contents followed, at the end of which a statement was formulated to the effect that Olmert has to "relate seriously" to the initiative. In any case, the Saudi initiative has a role not only in the diplomatic arena, but also in the domestic political arena in Israel. At a moment when the regime threatens to sink under the weight of the investigations, the scandals and the public anger, it can create the appearance of diplomatic hope and progress.

Three days before the authorized statement, Olmert's political team, the successor to former prime minister Ariel Sharon's "ranch forum," met to discuss the prime minister's political problems. They talked about the appalling public opinion polls, which gave Olmert a miserable 2 percent in the politicians' march of trust. But the Saudi initiative was not mentioned, even by implication, as a way out of the mud. It is not clear, therefore, what happened to Olmert over the weekend, or with whom he spoke, that convinced him to begin flashing smiles at King Abdullah. Perhaps it was opposition leader Likud MK Benjamin Netanyahu, who in an interview with Haaretz a week ago, ostensibly enumerated positive elements in the initiative. Olmert is prepared to take a lot of things from Benjamin Netanyahu, but he is not going to allow him to pass him on the left.

Housing and Construction Minister Meir Sheetrit, who has proposed that Israel adopt the Saudi initiative without conditions as a basis for negotiations, says that he pitched the idea to the prime minister as early as several months ago. "He said that it wasn't on the agenda," recalls Sheetrit.