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Rolling out tattered red carpets for arriving CIA chief George Tenet, Israelis and Palestinians took turns Monday in taking skewers to Washington's Middle East policies, but with no American-driven peace plan on the horizon, even the slap seems par for the course.

Hours before Tenet was to launch his mission to help revamp and rebuild the Palestinian Authority's battered security forces - a prelude to hoped-for prevention of fresh terrorist attacks against Israelis - the PA High Court stunned Israel by ordering freed from jail Ahmed Sa'adat, head of the Popular Front for the Liberation of Palestine and the man Israel holds responsible for ordering the October assassination of ultra-nationalist cabinet minister Rehavam Ze'evi.

U.S. officials were instrumental in striking the deal, under which Sa'adat was jailed in Jericho last month under American and British supervision, a step that allowed Israel to agree to release Yasser Arafat from more than a month of confinement to a corner of his Ramallah headquarters. The reaction of a senior aide to Prime Minister Ariel Sharon was as furious as it was fast. "If he is not brought to justice," warned Sharon spokesman Ra'anan Gissin, "we will bring justice to him."

When its operatives gunned down Ze'evi outside his hotel room in an area of Jerusalem captured in the 1967 Six-Day War, the PFLP said the shooting was in retaliation for Israel's "liquidation" of Sa'adat's predecessor at the helm of the radical group. Nonetheless, the three-judge judicial panel, meeting in Gaza, said it had heard no evidence that Sa'adat was involved in the killing.

Signs of a possible new cycle of violence were not long in coming. "Officials in Jerusalem are threatening to 'hit' Ahmed Sa'adat if the PA frees him from the Jericho jail," state-owned Israel Radio reported.

Across the benighted holy city, a groundbreaking represented another blow to U.S. peace hopes. Defying Washington's long-range hopes for a freeze on construction on lands held since the 1967 war and for maintenance of Jerusalem's brittle status quo, work began on a new Jewish neighborhood next to the Palestinian village of Jabel Mukaber, at the southern end of Arab East Jerusalem.

Hundreds of homes are expected to be built in the first phase of construction, which will be overseen by a company headed by former Jerusalem police chief Aryeh Amit. Jerusalem Mayor Ehud Olmert, dismissing claims by Jabel Mukaber residents that part of the land in question was their property, also rejected suggestions that the timing of the construction launch – coming as it did on the eve of Tenet's arrival – was ill-advised.

"If it had been up to me, this neighborhood would have been built long ago," said Olmert of Sharon's ruling Likud. Local and district planning boards had approved plans for the project years before. He said he didn't know why construction began only this week, saying it was decision of the project's developers. "Let there be no misunderstanding, I am not sorry about this. On the contrary, I am very, very, very happy that just at this time, period when everyone is sitting around with their heads down mournfully, crying over lost opportunities, private investors are coming forward in an intensive manner."

Seen in a wider context, the PA court decision and the East Jerusalem groundbreaking are less slaps at Tenet than they are reflections of the fact that neither Sharon nor Arafat wants to push a peace initiative forward at this time, says Ha'aretz commentator Gideon Samet.

At the same time, it is an expression, also, of "the very disappointing reluctance of the Bush administration to launch a serious peace initiative, with a plan outlining what the administration believes that such an initiative would entail," Samet continues. "It's not enough to just talk about how much we're in love with peace."

But Samet notes that Washington has shown strong inhibitions to applying pressure to either the Israelis or the Palestinians. "They are very apprehensive about American Jewish reaction to pressure on Israel. A senior American official said recently, 'To play the devil's advocate for a moment, so to speak, you must remember that if Bush had received a few more Jewish votes in Florida, he would not have undergone the terrible humiliation'" of a re-count.

"Bush learned a lesson," Samet says. "A first-term president doesn't want to pressure Israel, nor to pressure the Palestinians, because of possible negative reactions by the Saudis, the Egyptians and others. "

Beyond this, the Americans feel that the present situation "is not that bad for American interests in the area," Samet says, quoting the U.S. official as saying "Don't we still receive oil at good prices? And despite demonstrations in Cairo, don't our ships still pass through the Suez Canal? So why rock the boat?"

Lacking a serious U.S.-EU peace initiative, Samet concludes, "the slap in the face is not truly such, as it might have been with a full-fledged peace plan. If the peace program is piecemeal, then they get piecemeal slaps."