July 2005. U.S. Secretary of State Condoleezza Rice is visiting Prime Minister Ariel Sharon at his Sycamore Ranch on the eve of the disengagement from the Gaza Strip. It's a reciprocal visit, coming a few weeks after Sharon's trip to U.S. President George W. Bush's ranch in Texas. Sharon shows Rice the sheep and the fruit trees, and then the American and Israeli delegations meet for breakfast.

Sharon begins by identifying with the suffering of the Palestinians, and speaks of the great opportunity that will befall them in Gaza after the Israeli withdrawal. Rice's ears perk up; it's not every day that you hear Sharon displaying such empathy. "There are only two problems," says Sharon, turning his gaze to his left. "Dubi, how do you say 'bloodthirsty' in English?" Sharon's adviser Dov Weissglas chokes on his avocado salad as an embarrassed silence fills the room. U.S. Deputy National Security Adviser Elliott Abrams translates the term. Now it's Rice's turn to choke on her salad. "There are only two problems," repeats Sharon. "They're bloodthirsty and treacherous."

"All of them?" asks Rice.

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"Yes," the prime minister responds. "All of them."

Sharon's former advisers were reminded of that incident this week, as Hamas appeared to have beaten Fatah in the battle for control of Gaza, with dozens of Palestinians reported dead in the internecine fighting. Sharon, the advisers said, anticipated exactly what took place. In a speech before the United Nations General Assembly after the disengagement, Sharon said that now the Palestinians could develop their economy and build a peaceful society - if they so desired. Their challenge, he said, would be to eliminate the anarchy of the armed gangs.

In November 2005, in his last meeting with Rice, Sharon made an even more prophetic prediction. Hamas' participation in the Palestinian elections could lead to the end of the road map, he said, adding that Israel fully backs Bush's democratization efforts but that it wouldn't back the murderers of Jews, even if they participate in the elections.

If Rice forgot Sharon's warnings, she received an updated version last week from former defense minister Shaul Mofaz, who was participating in a strategic dialogue in Washington. Mofaz warned that the Hamas-Fatah clashes would continue, saying that Hamas' goal is to take control of the Palestinian Authority, by force if necessary. In comments to reporters, Mofaz used a word coined by Major General (res.) Amos Gilad: Hamastan. Only Mofaz jazzed it up a bit; he spoke of the "Hamastinian authority."

American policy in the Middle East, which has been characterized primarily by failure and entanglement, sustained another cruel blow this week when Hamas essentially seized control of Gaza.

"The American strategy has totally collapsed," Israeli officials said. "They carried out an exercise in democracy, and that led to the election of Hamas. Then they wanted to arm the Fatah operatives in Gaza so they would fight Hamas, instead of blocking the weapons and the money being smuggled into the Strip."

The advisers noted that Fatah's leaders, the darlings of the Americans, weren't even present when Hamas was killing their followers. Early this week, while Fatah fighters were being thrown off multi-story buildings and Hamas was capturing one outpost after another, reports that Israeli officials described as "Dayton's spin" continued to pour into Washington. In a trip to Washington three weeks ago, U.S. security coordinator Lieutenant General Keith Dayton provided his superiors with an encouraging description of the strengthened forces of Palestinian Authority Chairman Mahmoud Abbas and of the Fatah forces' determined fighting against Hamas in the previous round of violence. Similar reports came out at the beginning of this blood-filled week, but Israel expected to see a rapid end to such statements. "The reality in the field will overpower them too," an Israeli official said - and then the Americans will be forced to realize who has won.

Convenient backdrop

The American embarrassment provides a convenient backdrop for Prime Minister Ehud Olmert's visit to the White House on Tuesday. Worrying rumors about Bush's expected June 25 speech marking five years since he announced his now-moldy vision of a two-state solution were circulating in Jerusalem. Israeli officials spoke of America's "new ideas," a phrase that in Israel always ushers in the desire to run to a bomb shelter. But the chest of American ideas suddenly has emptied. It's tough to argue seriously that Abbas is a "partner." After he lost Gaza, how could he be put in charge of the West Bank?

Under such circumstances, it will be hard for the United States to make demands of Israel, which now borders an Islamic terrorist entity. The Americans were planning a diplomatic blitz over the next two weeks, focusing on the Palestinian issue. After Bush's speech, Rice will visit the region; the previous visit had been deferred, and after all, Rice has promised to come every five or six weeks. There will be the international Quartet and the Arab League. All these were meant to deal with strategy, with the "political horizon" - but even the Americans acknowledged this week that events in the PA will change the agenda.

The fire first has to be extinguished. Only then will it be possible to plan the house that will replace the one that burned down. For Olmert, the visit with Bush will be an important stop on his political comeback campaign, which began with the election of Ehud Barak as Labor Party chairman and Shimon Peres as president, and will continue with a reshuffle in the government. Bush backed Olmert even in his most difficult hours; the president released a statement of support for Olmert after the interim Winograd report on the Second Lebanon War came out, prevented Rice from forcing her political initiatives on him, and didn't seek out Israeli politicians who do better in opinion polls. The fact that both leaders are unpopular but are still in power has only brought them closer.

What will they discuss? The Hamas victory bolsters Israel's unstated policy of dividing the Palestinian Authority into two states - Gaza and the West Bank. Israel cannot say this out loud in front of the Americans, who are committed to a single Palestinian state, so Olmert will have to speak in code. He will suggest that Bush strengthen international support for the peace process. This would involve deploying an international force in Gaza, implementing an engineering solution to block arms smuggling in Rafah, pressuring the Egyptians to do more against the smugglers, and encouraging the Saudis to stop being embarrassed by the collapse of the Palestinian unity agreement cooked up in Mecca. Foreign Minister Tzipi Livni will present this policy on Monday to 27 European foreign ministers, who invited her to speak at a conference in Luxembourg.

The Americans, meanwhile, are not rushing to switch gears. They still believe that strengthening Abbas is the only solution left, and that's what they'll tell Olmert. Some American officials listened skeptically this week to talk of handing Gaza over to a multinational force. Questions that were raised included who would send these forces and how they would carry out their work. Israeli complaints last week that UN Security Council resolutions are not being enforced in Lebanon, where a multinational force already has been deployed, bring the doubts into sharper focus.

"It sounds to me," said a well-informed Israeli security official, "like one of Shimon Peres' seasonal delusions of peace." Or, to use his new title, like one of the honorable president's delusions of peace.

All the same, officials in the Prime Minister's Bureau expect the new reality in Gaza to force the American administration to pay more attention to Israeli ideas. If the internationalization of Gaza does turn out to be practical, it will raise the question of what to do with the West Bank. A senior political official in Jerusalem said this week that Israel must not despair of having Abbas as a partner, because he can be useful despite his failure in Gaza, and that Israel should not rush to hold talks with Hamas or adopt proposals for placing the territories under international trusteeship. The world is eager to see political progress, and as a first step, it is pressuring Israel to release the PA's frozen tax funds. The collapse of the Palestinian unity government provides an opportunity to transfer the funds to Abbas.

Rice and Livni support talk of a "political horizon," a kind of theoretical discussion with the Palestinian "moderates" over the character of their future state. Nothing will be implemented until the Palestinians meet several tests; in the meantime, the international pressure on Israel will ease up. Europe will be asked to provide financial aid, and the Arab League will be asked to take steps toward normalized relations with Israel in exchange for Israeli gestures toward the Palestinians. Something like "Israeli representation in Bahrain in exchange for the release of 500 prisoners" or "a photograph of Olmert and Livni with Persian Gulf princes in exchange for the removal of 40 roadblocks."

The Reagan diaries

In September 1986, then U.S. president Ronald Reagan scrawled a short note of regret in his diary. Then Israeli prime minister Shimon Peres, who had committed to a rotation agreement with the Likud, had been replaced by Yitzhak Shamir - and Reagan would have preferred Peres stay in the position. A year before, in October 1985, Reagan wrote that Peres was "the most flexible and resourceful" Israeli prime minister he had known since becoming president; the other two he had known were Menachem Begin and Shamir, both from the Likud. When Reagan first met Peres in August 1982, Peres was the opposition leader, and Reagan considered him quite a contrast to Begin. The material - which makes for sometimes exhausting, occasionally enjoyable reading - can be found in Reagan's personal diaries, which were released a few weeks ago in the United States, with only minimal editing by historian Douglas Brinkley.

Reagan met with his secretary of state, George Shultz, while Lebanon was burning in August 1982, a day after Reagan demanded Begin stop bombing Beirut. After meeting with Shultz, Reagan went to Camp David to relax, and watched the movie "An Officer and a Gentleman" - which he described as a good story spoiled by nudity, bad language and sex.

The year before, before the Lebanon War began, Reagan met with Begin in Washington. Then, as now, a large security deal between the United States and Saudi Arabia was on the table. Then, as now, the Americans wanted to sell and Israel opposed the move. In 1981 the standoff ended with a major confrontation in Congress that Reagan won, and the Airborne Warning and Control System (AWACS) planes were sold to the Saudis.

This time, it seems, there will be no overt clash. Israel, a Pentagon official said two weeks ago, is getting used to the idea. Last week Defense Ministry representative Amos Gilad and Israel Defense Forces representative Ido Nehushtan went to Washington to discuss the details. It appears there will be a deal; the question is what Israel will get to assure its continued military supremacy. Olmert and Bush are likely to deal with this issue as well during their meeting.

An Israeli official said this week that the issue is being handled at the professional level - meaning that the Israelis and Americans are trying to reach an agreement, in contrast to what happened in 1981. All the same, the similarities between then and now are hard to miss; they are expressed primarily by the reasons given by both sides for and against the deal.

Reagan wrote in his diary on September 9, 1981, about a conversation he had with Begin about the Saudi deal: "I told him how strongly we felt it could help bring the Saudis into the peace-making process."

All the same, more than 25 years have passed, and the Americans are still trying. The current deal, they say, will help keep Saudi Arabia in the moderate camp. The Americans, along with Olmert, are still hoping that the Saudis might even agree to join the peace process, some time.