The death of Palestinian Authority Chairman Yasser Arafat would set in motion a sequence of events that could culminate in an Israeli-Palestinian peace agreement, a report released this week by the U.S. intelligence community predicts.

The intelligence estimate casts doubt on the likelihood of a full peace settlement materializing in the years before 2020; nonetheless, should an Israel-Palestinian agreement for a "cold peace" win support among a majority of Palestinians, it would constitute the most significant development in the region since the establishment of the State of Israel in 1948, improve the Arab world's attitude toward the U.S., and eliminate a pretext used by Arab countries which are reluctant to implement political reforms, the U.S. assessment claims. Israel, the evaluation adds, will not relinquish nuclear weapons it possesses.

The evaluation was formulated by the National Intelligence Council, which operates under the guidance of CIA director George Tenet. The National Intelligence Council chairman, Ambassador Robert Hutchings, takes part in National Security Council discussions. The Intelligence Council, which is responsible for providing short- and middle-term strategic assessments to the U.S. government, recently conducted reviews of likely developments in regions of the world up to the year 2020.

The Middle East section of this global assessment warns about the possibility of a war between Israel and Syria, or some other Arab state. In such a future war, it is possible that unconventional (biological, chemical or even nuclear) weapons could be used, warns the National Intelligence Council. Such a war would eradicate the softening of Arab attitudes toward the U.S., and also derail efforts to revive progress on the Israel-Palestinian peace track. Another rout of an Arab army by the IDF would cause Arab populations to reconsider the viability of their political regimes.

The American intelligence experts express concern about possible political unrest and upheaval in Egypt or Saudi Arabia. Among other negative effects, the establishment of a radical regime in Egypt would upset that country's peaceful relations with Israel.

"In the Israel-Arab conflict there have been pleasant surprises," notes the Intelligence Council evaluation, "but the dispute has almost always reverted back to spheres of hostility and suspicion. Sadat's visit to Jerusalem did not blaze a trail, because only Jordan followed Egypt's lead ... The Oslo Accords collapsed not on account of unpleasant surprises or new problems, but rather due to ongoing animosity and suspicion."

The American intelligence analysts believe that Islamic political groups will in the Arab world out-last secular rivals such as Nasserism or Marxism. Yet it is unreasonable to assume that the Islamic regime in a country like Saudi Arabia will last - however difficult it is to forecast what might come next in Saudi Arabia, it is plausible to assume that some change will come, claim the intelligence experts. Iran, they say, will change significantly during years leading up to 2020, and become more liberal and democratic.

The use of terrorism is likely to become directed increasingly toward internal targets in Arab countries, claims the National Intelligence Council. "Part of the deal worked out between Arab regimes and peoples today is that violence is directed toward the outside, against Israel and Westerners. International pressure against these regimes, demanding that the export of terror be stopped, will direct the violence inward, toward internal targets in the Arab countries themselves," claim the U.S. intelligence authorities.