1. Alibi

Last year, at a meeting of European Union foreign ministers, then-foreign minister Shimon Peres gave a fiery speech objecting to the EU's demand that Israel include some kind of geographic labeling on products that it exports to the continent. Among other things, Peres told his colleagues that this could rightly be brought up when negotiations were being conducted between Israel and the Palestinians over a final accord, but that there was no justification for it when the two parties were completely caught up in a violent conflict. The Europeans accepted his argument and backed down. In their time, Dalia Itzik of Labor, who preceded Ehud Olmert as Minister of Industry and Trade, and her predecessor, Ran Cohen of Meretz, also rebuffed pressure from the EU to specially label Israeli products that originated in the territories beyond the Green Line. This week, some senior figures in the Labor Party were amused to see Olmert making this concession to the EU. The blunter ones among them called him "a dishrag who can't take pressure."

Members of the current government's more rightist wing shared their view. Some said that Olmert had capitulated unnecessarily, and thus created a dangerous precedent that distinguishes between Israeli products from different sides of the Green Line. These ministers were also critical of how Sharon and his bureau handled the matter of last week's UN Security Council Resolution to adopt the road map. They wondered what UN Ambassador Danny Gillerman was doing during the decisive vote (he was on vacation in Paris), and what good were the optimistic assessments with which Sharon returned from Moscow regarding this matter (Sharon reported that President Putin had told him that Russia would not do anything to hurt either party to the conflict). The dominant theme of the right-wing ministers' complaints was that this was all just further proof of the poor functioning of Sharon's bureau and of Israel's UN delegation.

Belittling Olmert's resolve and finding fault with the skill of the UN delegation are both convenient ways of burying one's head in the sand; the Sharon government is starting to pay the price - in the international arena - for its policies toward the Palestinians. It is under siege without realizing it or being prepared to admit it.

Olmert was faced with a threat that could have cost the state an annual half billion dollar loss, and the UN delegation was helpless to do much in the face of an American-Russian alliance. And as if that were not enough, Sharon's bureau chief, Dov Weisglass, was made well aware of the limits of the U.S. administration's patience, and returned from Washington bearing word of a nearly $300 million reduction in American loan guarantees. It wasn't the skill of the Israeli emissaries that dictated these unhappy results, but the government's stance toward the Palestinians: The world has lost patience with the continuation of the occupation and with Israeli stratagems to perpetuate it, and is starting to inflict pain on Israel - by hitting it in the pocket, for one thing - in order to compel it to change its ways.

Sharon has his own perception, based on his military experience, of when a force is under siege and when it is doing the besieging (he sees this as something that is subjectively defined in accordance with the commander's degree of self-confidence). But if he just took a good look around, he would have to admit that the aggregate of recent developments in the international arena resemble a noose that is starting to tighten on Israel, reminiscent of the circumstances that led to the downfall of the apartheid regime in South Africa.

2. Precedent

Several weeks ago, Malcolm Hoenlein of the Conference of Presidents of Major American Jewish Organizations took note of Russian Foreign Minister Igor Ivanov's desire to secure official UN Security Council acceptance of the road map. Hoenlein also pointed out the danger inherent in this: The road map would thus be transformed from an American document with the status of a proposed outline for an Israeli-Palestinian accord to a binding directive of the UN Security Council that countries like Syria and Algeria could interpret as they please and seek to implement accordingly. Hoenlein alerted the Israeli government and the Jewish lobby in the U.S., urging them to try to persuade the American administration to torpedo the UN Resolution. The effort seemed to be working: In Washington, they promised to get the idea frozen; in Moscow, Sharon got the impression from Vladimir Putin that Russia would withdraw its support for it, and in Israel they believed that the danger had passed.

Last week's development came as a surprise: Russia went ahead and presented its draft resolution and the United States did not object. Urgent entreaties from the Israeli Embassy in Washington, the Israeli UN delegation and the Conference of Presidents could not undo the Russian-American coalition. A talk that Ariel Sharon had with President Bush's Mideast adviser Elliot Abrams during his recent official visit to Rome was also of no avail. The Conference of Presidents recommended that a dramatic appeal be made to President Bush, but this suggestion was turned down. In retrospect, some in Jerusalem thought that this was the American administration's way of repaying Moscow for its support of the UN resolutions concerning U.S. involvement in Iraq.

Sharon's spokespeople were doing their best this week to give a reassuring characterization of the UN Resolution: The wording is very general; there's nothing threatening in it; Israel has already adopted the road map so there's nothing wrong with the UN extending its sponsorship to it as well. The Prime Minister's Bureau effectively likened the UN Security Council Resolution to the fish that were hastily removed from supermarket shelves this week and then hastily put back: One minute it's dangerous and the next it's worthy of being counted among the official international efforts aimed at resolving the Israeli-Palestinian conflict. Hoenlein is less sanguine: He says that the Security Council could now start to document whatever it defines as Israeli violations of the road map. The resolution explicitly says that the Council will monitor the road map's implementation. In the future, the Security Council could consequently decide to impose sanctions on Israel. Hoenlein also made an interesting observation: The Gulf War, which the United States declared on Iraq in 1991 with UN support, arose out of a similar process.

JUMP: BNZIMAN

3. Threat

A similar thing happened with Israel's handling of the European demand for labels denoting a product's origins. Israel has been presented with this demand for over five years, and successive governments always resorted to stalling tactics: Under Ehud Barak, Minister of Industry and Trade Ran Cohen, Minister for Regional Development Shimon Peres and Foreign Minister Shlomo Ben-Ami explained to the EU that a peace accord based on an Israeli withdrawal from most of the territories - including from the industrial areas there - was just in the offing.

Subsequent governments argued that it was unacceptable for the EU to dictate Israel's permanent borders by defining its industries that are presently located in the territories as being outside the state's boundaries. In the current government, Foreign Minister Silvan Shalom has taken the same line, in an effort to buy time. This position, which was supported by the professionals at the Foreign Ministry, says that the dispute over tariff exemptions for products originating in the territories is a trivial economic issue and that the real motive behind the EU's pressing of this matter is political - the desire to pressure Israel to change its positions toward the Palestinians.

In meetings in Brussels two weeks ago, Silvan Shalom was able to obtain the EU's agreement to send a delegation to conduct negotiations with Israel; in other words, to stall for a few more months with the expectation that negotiations between Israel and the Palestinians will resume by then. The Sharon government appeared to be sticking to the argument that Europe cannot determine the state's final borders and must leave this to the relevant parties.

Then Olmert went and overturned all that by agreeing to the special labeling for products manufactured in the territories. Shalom and his colleagues at the Foreign Ministry were livid: This is a grave precedent; the next thing you know, Israeli citizens will be given different classifications according to their place of residence when seeking visas for EU countries. From Olmert's perspective, there was no other choice. He informed Sharon and Shalom about which way he was leaning, and heard no reservations from them. He used his authority to make a decision on a matter that has been weighing on Israeli-European trade relations for over five years now.

Israeli exporters whose production plants are inside the Green Line lose hundreds of millions of shekels each year because of mistaken identifications by Europe, which bans products produced in the territories. Olmert was told that the entire tariff exemption (which amounts to about $500 million a year) could be suspended if a solution to the problem was not found quickly. Silvan Shalom was no stranger to this possibility; he was also informed of it during his talks in Brussels. Olmert's position is that all the fuss being made now is over nothing: The products' origins will be noted only on the accompanying export papers and not on the packaging itself. The tax break that exporters from the territories stand to lose will amount to no more than $12 million a year.

Olmert also believes that the state could compensate them for this, which is really the obligatory solution. Since the state is the one that made lands available to Israeli factory owners in the territories, funded the expansion of their infrastructure and built industrial areas for them, it should now be the one to subsidize the losses caused to them by the cancellation of the tax breaks from the EU.

4. Interpretation

Two days ago, in the Knesset cafeteria, Shimon Peres said that the real debate between Labor and Likud is over the significance of time. While the government lives from hand to mouth and is primarily interested in postponing the necessary decisions, the main opposition understands that within three years, the state will be in an incomparably worse situation, and in order to avert such a predicament, is advocating that decisions be made right now.

"What are we waiting for?" Peres asked angrily. "For the moment when Iran has nuclear weapons, when the Jewish demographic advantage is erased and when the economy hits absolute bottom?" Peres does not see the point of exerting himself in trying to decipher Sharon's intentions: Will he dismantle settlements, will he remove outposts, what exactly are the unilateral moves he is talking about? As he sees it, the key factor is the composition of the government, and judging by this yardstick, there is no chance that the prime minister will deviate substantially from his present policies. According to Peres, Sharon is a prisoner of the coalition that he put together: It will not allow him to reach a reasonable accord with the Palestinians, no matter what he says.

But the far-right ministers in Sharon's government take a different view of the prime minister's declarations: They believe him. They've noted the consistency with which he has expressed a readiness to come to far-reaching compromises with the Palestinians, including the uprooting of settlements and a withdrawal from a significant portion of the territories - from his declaration of willingness to recognize a Palestinian state, to his acceptance of the road map and of President Bush's vision of a future peace accord, his use of the term "occupation" and his recent allusions to a plan to take unilateral steps and to evacuate some settlements.

In their view, the only thing stopping Sharon from going ahead with this dastardly scheme is the behavior of the Palestinians: Even with all the slack that Sharon cut Abu Mazen, the latter still did not produce the goods. Sharon accepted the road map, but Yasser Arafat sabotaged its implementation. Sharon decided to hold the IDF's fire on several occasions, but Palestinian terror continued to strike at Israel and destroyed any chance of forging a more lasting cease-fire.

The ministers of the far right monitor Sharon's statements very carefully and remember them well, such as how he told Amram Mitzna, about six months ago, that evacuating Netzarim was out of the question, and how he is now signaling a readiness to do just that. How, a month ago, he announced that a unilateral solution would be a victory for terror and is now talking about just such a move. How throughout his entire political career, he adhered to the principle that the uprooting of settlements was unthinkable, and then a few months ago told Haaretz Magazine that leaving places like Beit El was a possibility.

Today, they wonder why Sharon sees any need to talk about dismantling outposts and making gestures to the Palestinians; in their view, as long as Abu Ala does not fulfill his part of the conditions stipulated in the road map (first and foremost, disarming the terrorist organizations), there is no justification for any Israeli concession whatsoever.

The Yesha Council shares this assessment. It now believes that Sharon is capable of anything, that he is not one of those people who are connected to the Land of Israel with every fiber of their being, that he is not a true-blue Likudnik. To their minds, he would be right at home ideologically in the Labor Party. They feel that his choice of the Likud as his political framework was thoroughly opportunistic. That's why the settler leaders take an utterly serious view of the scenario in which Sharon is behind the wheel of the bulldozer that comes to uproot settlements.

None of Sharon's actions have contradicted his declared positions. He hasn't taken a single real step that would constitute a concession of any kind to the Palestinians, and perhaps even the contrary. He has continued with the targeted assassinations policy and thus contributed to, if not caused, the undermining of the cease-fire. When confronted with those arguments, the settler leaders respond that just stating such ideas is extremely serious; it gives legitimacy to the demand that the State of Israel be returned to the borders of the Green Line.

And incidentally, the Yesha Council says it will not permit the removal of outposts at which families are residing - no matter how small their number.