Something is moving in the diplomatic process. Fact: Close associates of Palestinian Authority Chairman Mahmoud Abbas have told friends on the Israeli left that this time they emerged satisfied from their meeting, on Sunday of this week, with Prime Minister Ehud Olmert. Fact: On the day after the meeting, intra-Palestinian agreement was achieved for the suspension of the shooting of Qassam rockets from the Gaza Strip into Israel, and by Wednesday only four mortar shell hits were registered. Fact: Olmert has for the first time agreed to discuss "the diplomatic horizon" with Abbas and to start talks on the security and economic arrangements that will prevail between Israel and the future Palestinian state. Fact: The Arab League has appointed, for the first time in its history, a delegation to advance its peace initiative with Israel. Fact: The Karni crossing point for goods, the main artery of Gaza's economic life, reopened this week in an expanded format. Fact: The U.S. army general Keith Dayton has received a budget for the training and equipping of Abbas' presidential guard and for the bureau of his national security advisor Mohammed Dahlan.

How should these signs be read? That depends on whom you ask. At Olmert's bureau they are speaking cautiously. There is a lot that is being done, they say there, and we shall see where it leads. Olmert was hoping for a meeting with the Saudis with lots of media coverage, in the guise of a regional peace conference, and in the meantime he has encountered a refusal. The Arab League delegation will consist of Egypt and Jordan, which speak to Israel all year around. No exciting image is going to come out of that. The Arabs are in no hurry to extend help to Olmert, in light of the public criticism he's facing and the approaching release of the Winograd Committee's interim report. Perhaps they are waiting, like the Israelis, to see whether and how Olmert survives Winograd, and then they will weigh their steps.

Olmert's new willingness to talk with Abbas about the "diplomatic horizon" can be read in two ways. The one identifies a relinquishing of former prime minister Ariel Sharon's ironclad principle of not talking about diplomatic matters before the Palestinians extirpate terror and "become Finns," in the words of former advisor Dov Weissglas. Sharon suspected a trap, in which Israel would be coerced into accepting a permanent status agreement along the lines of the one pursued in 2000 by president Bill Clinton and then-prime minister Ehud Barak, or risk being condemned as refusing peace, and therefore he refrained at any price from entering the negotiating room, each time with a different excuse. One time he demanded "seven days of quiet," then the replacement of the Palestinian leadership, and when that too was not enough, he evacuated Israel's Gaza settlements. In that way he bought himself quiet.

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Though Olmert, in this version, is continuing to talk about the Bush "road map" and refusing to talk about Jerusalem, final borders or the Palestinian refugees, from the moment he agreed to talk with Abbas about the "diplomatic horizon," and that even for only 40 minutes, as on Sunday this week, the way was paved back to shelved proposals from Camp David and Taba. The world is accepting Abbas' demand to talk about permanent status, and is applying considerable pressure to Olmert, confronting him with expectations for swift progress. This pressure will slowly peel away Olmert's ability to say no, and his bargaining positions.

Nonsense, says the counter-version. Olmert, considering his shaky position in the public- opinion polls, does not have public backing for a dramatic diplomatic move, and if he attempts one, he will risk the breakup of the coalition with Minister of Strategic Affairs Avigdor Lieberman's party and Shas. Abbas can talk and talk, but he's not in a position to reach an agreement and certainly he cannot implement one. In these circumstances, Olmert is only trying to placate American Secretary of State Condoleezza Rice at the lowest price possible. Therefore he agreed to the bi-weekly meetings with Abbas and to employ fine phrases like "diplomatic horizon." In any case, before anything else, Olmert has to bring Gilad Shalit back from captivity and then endure the inevitable criticism that will accompany the release of terrorist murderers. Only then, and if he gets through Winograd unscathed, will Olmert really be able to think seriously about the diplomatic horizon.

Alabama: Three-fifths a man

And what does Condoleezza Rice want? This coming month she will be in the region twice, at the summit of Iraq's neighbors in Sharm el-Sheikh and at the Economic Forum conference in Jordan, from which she will pop over to Jerusalem and Ramallah. Before her visit, the Americans will present Olmert and Abbas with the "tests of implementation" that they will evaluate: a Palestinian war on terror and Israeli easements for the population in the territories. Rice's aides were angry at the negative reports in the Israeli media that followed her last visit to Jerusalem. They thought that she deserved more credit for her efforts and her achievements, and "administration sources" leaked to the news agencies that by the summer significant progress will be achieved in the talks between Israel and the Palestinians. Rice, insist people who work at her side on the Israeli-Palestinian issue, has the full and total support of President Bush. Attempts to depict a gap between their positions, say administration officials, indicate either one of two things: Either the press is wrong or its sources, presumably elected officials and civil servants in the Israeli government, are wrong. It would be better, said one administration official, to accept things as they are, and not to hope for cracks in the administration that would enable Israel to maneuver between Rice and her boss. As for Rice's commitment, no one disputes it, certainly not this week.

Additional proof of this commitment, and its sources, came this week in a long conversation the secretary held with a group of foreign correspondents, during which she was asked, among other things, how the expenditure of U.S. money to improve America's image in the Arab world concords with "the increasing tension in Palestine and Lebanon and Iraq and Somalia."

Rice replied at length, but the most interesting part of her answer was when she spoke about her personal experiences. "My ancestors in the first American Constitution were three-fifths of a man," noted the secretary, but we have progressed since then: "And I'm not even the first black secretary of state." Before her there was Colin Powell. The solution for the Middle East, just like in the United States, she said, is "more open societies." And as for the problems of the Middle East, "No one is more devoted to trying to resolve them."

This was a general statement, which was followed by an example, the conflict in which Rice is engaged: Israel and Palestine. "This government is absolutely - this President is absolutely committed to trying to get there, to the creation of a Palestinian state," she asserted.

American commentators assess that Rice is aiming to achieve an agreement in principle for the establishment of a Palestinian state, as a key aim in "the Bush legacy." The implementation, apparently, will be left for the next man or woman who serves as president.

Washington: Satisfaction

Palestinian Finance Minister Salam Fayad made no effort to conceal his smile. It was a smile of satisfaction. His meeting with Secretary of State Rice, about which there had been no previous announcement, was only one element in an assault of several days during which he conquered America, as though there had never been a Mecca agreement for the establishment of the Palestinian unity government. The Americans are now working, with his encouragement, but also of their own free will, on ways that will enable a more effective flow of money to the Palestinians. To this end Fayad also met with U.S. Treasury officials, and the intention is to transfer funds to accounts that Fayad controls and that belong to the Fatah, not to the government of which the Hamas is part. The administration did not apologize for the high-level meeting; on the contrary. This is our way of making a distinction between extremists and moderates, said a senior official in a briefing.

Israel, at this stage, has decided to remain silent. This is not the time to quarrel with the Americans. In discreet channels, questions concerning future financial moves have been transmitted, in an attempt to make it clear that an end to the international economic boycott would render the Israeli boycott a joke. Again Israel will be depicted as the lone refuser, which is not opening its wallet and is keeping Palestinian tax monies frozen.

Israel found itself this week in one position of refusal at the dialogue encounter financed by businessman S. Daniel Abraham, who is close to Olmert, that was hosted by the Saban Center for Middle East Policy at the Brookings Institution. Official Israel boycotted the event, at the prime minister's instructions, and Deputy Defense Minister Ephraim Sneh, who was supposed to have made an appearance, stayed home. The head of the center, former U.S. ambassador Martin Indyk, did not hide his position: "It is hard to believe that Fayad constitutes a threat to Israel," he said. He also predicted that in the future Israel will have no alternative but to enter the same room as Fayad, for example at an international meeting of finance ministers of one sort or another.

Paris: Resistance

The presidential elections to be held in France on Sunday are arousing expectations among several Israeli politicians and professors of a dramatic change at the Elysee Palace. They are hoping that the anticipated election of Nicolas Sarkozy as Jacques Chirac's successor will bring about a turnaround in France's traditional position, which is perceived in Israel as obsequiousness toward the Arabs. Someone who is combating Muslim immigrants and in favor of a French rapprochement with the United States, should understand well and accept Israel's behavior in the territories.

Sarkozy has not been elected yet and it is hard to know how he will act, but it appears that Israel's expectations of him are exaggerated. In an interview he granted to the American magazine National Interest, the candidate talked more like a member of Meretz than of the Likud central committee. The only solution, said Sarkozy, is negotiations for the establishment of a Palestinian state. "No one can deny a fundamental reality," he said: "An occupied people will never give up, no matter what they have to endure." He added that "The security of Israel can not be questioned and nothing justifies the use of violence by the Palestinians," but argued that "Israel's adherence to a policy of fait accompli mortgages their future." Sarkozy promised that France and its partners would continue to do what they can to foster an agreement, for the most part through the Quartet.

Damascus: 45 minutes

On Sunday evening, former secretary of state Madeleine Albright appeared at the opening of the annual convention of the Religious Action Center (RAC) of Reform Judaism at the Washington Hebrew Congregation. Albright knows a thing or two about the Israeli-Palestinian conflict and can look longingly at her successor, Rice, who is making an effort to end it before she ends her term. In Albright's case and that of her president, Bill Clinton, who certainly wanted to do that, it did not work out. The former secretary said that she is not one of those who think that the Israeli-Palestinian conflict is at the center of all the problems of the Middle East. Nevertheless, she added, she is worried about the lack of progress.

Albright's was a more successful, cautious and measured statement than that of her former boss, Clinton, who this week explained that the Israeli-Syrian conflict could be solved "in 45 minutes." This is, after all, the same conflict that Clinton tried to solve for years without success. Apparently it is much easier to resolve conflicts when they have become somebody else's headache.

Clinton is now on a trajectory that could return him to the White House, and Albright to the position of a respected advisor to the president. Her positions, say people who are close to her politically, to a large extent reflect the positions of the senator from New York who is running for president, Hillary Clinton. Albright herself has defined these positions as "idealistic realism" or "realistic idealism." She is against dividing the world into categories of "good" and "evil," because though it may be easy to determine who is evil, she has said, it is harder to define who is good.

One thing is clear: An administration that listens to Albright is not an administration that will retreat from the Middle East and its problems. "We are still needed in the world," she told her audience, most of them Jews, most of them very liberal. Her aim was clear: What is happening in Iraq must not lead to despair at American involvement in world affairs. And in this sense, the next Clinton administration, should there be one, will resemble the current Bush administration a lot more than some of its voters would like to believe.