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1. Nasrallah presses the button

On Tuesday, it almost happened: a major flare-up on the northern border with the potential for a confrontation with the Syrian army and a threat to the Israeli home front as far back as Haifa. This scenario, which has its source in detailed intelligence reports, has been haunting defense officials for some time. It's a chronicle of death foretold: Hezbollah militants who are planning to ignite the conflagration are known, as are the types of actions and responses that will lead to the inevitable escalation and its lethal consequences: death and destruction on both sides of the border. On Tuesday afternoon, as the incident near Kibbutz Metzuba - in which one Israel Defense Forces officer and five civilians were killed, and seven others injured - began to unfold, worry clouded the faces of decision makers in Jerusalem: Hezbollah appeared to have pressed the button that would set an unstoppable deterioration in motion.

The ruling assumption was that Israel could not refrain from responding to a bold provocation that involved infiltration of its territory, the murder of civilians and an infringement on its sovereignty. Further, having withdrawn from Lebanon - at Ehud Barak's orders - up to the final millimeter of the international border (apart from the disputed Shaba Farms area), Israel is entitled to have total quiet in the north. Some say that after the abduction of the three soldiers in October, 2000, Barak committed a grave error by not making good on his threat to strike hard at Lebanon should the calm that followed the IDF's withdrawal be disturbed.

Ariel Sharon was given credit for restoring some of the IDF's deterrent capability when he did not hesitate to attack a Syrian radar station in response to fire from Hezbollah. However, the Sharon government understands that not every provocation requires a crushing response. Its aim is not to open a second front on the northern border, but to maintain a deterrent balance of forces there. But when Sheikh Nasrallah explicitly announces his intention of coming to the aid of the Palestinians, without using the dispute over the Shaba Farms area as a justification, his declarations are taken very seriously in Israel.

On Tuesday, Hezbollah appeared to be making good on its threat: The attack on vehicles traveling between Metzuba and Shlomi seemed to signal that the zero hour was drawing near. Despite Ariel Sharon's insistence that he would not drag the nation into war, and despite Defense Minister Benjamin Ben-Eliezer's desire to avoid opening a second front, and even though the dimensions of the escalation and its cost were perfectly clear to the political echelon, the government seemed to be caught in a trap. Restraint would be construed as a demonstration of weakness and only serve to encourage Hezbollah to carry out another, more serious, provocation. Responding would play straight into Arafat's hands - since the Palestinian Authority leader is eager to expand the conflict with Israel into a regional war - and it would also please Iran, which seeks to complicate relations between states in the region even further.

On Monday, Israel warned the United States of Hezbollah's impending plans to ignite a more deadly cycle of bloodshed. Washington's response was that there was no evidence of this. The Bush administration is kept well apprised of the intelligence information in Israel's possession concerning Hezbollah plotting, and of Israel's response plan. It knows that an infiltration of forces from Lebanon to Israel (even if the infiltrators are men from the Palestinian refugee camps in Lebanon, who were trained and armed by Hezbollah, rather than members of the organization themselves) would compel the IDF to respond forcefully. It knows that the IDF would not limit itself to an attack on Hezbollah forces, but direct much of its power toward the Syrian deployment in Lebanon. It also knows that, in response, Katyushas and missiles would likely be fired deep into Israel and that Israel would pay back Lebanon (if not Syria) in kind.

The big explosion was prevented, or deferred, because the identities of the terrorists have remained unclear. Hezbollah hastened to announce that it was not behind the attack and Israel announced that it was continuing its investigation (as of the time of writing, yesterday) in order to solve the riddle. Meanwhile, time has passed and General Anthony Zinni was due here yesterday to try to divert the Israeli-Palestinian conflict from its murderous path. The upshot: Even if proof is found that Hezbollah was behind the attack near Metzuba (which was the prevailing intelligence assessment at the time of this writing), the question of timing will have a decisive impact on the nature of the Israeli response.

2. Ben-Eliezer pounds the table

The Anthony Zinni who has just arrived in the region is not the same Zinni who tried to achieve a cease-fire three months ago. This time, the special envoy is coming to Jerusalem just as a change in the Bush administration toward Israel's position has become apparent (anyone who still had any doubts after Secretary of State Colin Powell's remarks last week had to be convinced Wednesday night, upon hearing President Bush's criticism of Israeli operations in populated Palestinian areas), and after the prime minister opted for Shimon Peres over Avigdor Lieberman. Zinni is to visit Ramallah, where Israeli tanks are parked and Yasser Arafat is going around like a wounded animal, and Jerusalem, where the prime minister has suggested a special call-up of reservists (from which he backtracked in wake of the reaction from cabinet members).

In explaining his decision to withdraw his insistence on seven days of quiet, Sharon told the right-wing ministers that he was making an empty gesture for the purpose of obtaining a concrete asset: With the leeway gained by the announcement of this concession, the IDF invaded Palestinian cities and refugee camps. What he meant was that Zinni will have to start the mediation process from a point at which the IDF has got the PA by the neck; in exchange for any relaxation of the Israeli military pressure, Arafat will have to take a step of his own that satisfies Israel's interests.

The prime minister's listeners didn't buy it: Natan Sharansky, for one, told Sharon that he was sacrificing a principle that has supreme strategic value - the demand that gestures be made on a mutual basis - for the sake of a tactical gain. He argued that Israel could not possibly retract a condition it placed before the Palestinians without getting something from them in return. The Labor ministers disagree with Sharon's starting point for talks with Zinni: They believe Israel should show greater consideration for Arafat's situation and calculate its moves so as to help the PA regain its status as a central authority. Egos notwithstanding, this was the backdrop to the angry exchanges between Sharon and Ben-Eliezer at the cabinet meeting two days ago.

Ben-Eliezer asserts that, having announced that his main objective is to achieve a cease-fire, Sharon cannot keep undermining this goal with provocative military actions. Therefore, he vehemently opposed Sharon's effort to circumvent him and order the IDF to move closer to Arafat's headquarters, where dozens of suspects have found refuge. Peres believes that Zinni's arrival puts both sides at a crossroads, where they have a chance to choose a different path than the one on which they've been battling each other up to now.

The Labor ministers believe that the present situation cannot continue: Clearly, the use of military force alone is not inducing the PA to surrender or to be ready to talk with Israel; the change in the American position is a very serious development that Sharon must take into account; and the decline in Sharon's popularity, as a result of his failure to provide security as promised, has to have an impact on the prime minister's position, too. They think Sharon's behavior indicates that he is ready to pay the political price entailed in changing course, as evidenced by his willingness to let the National Union faction resign.

The outcome of the cabinet debate the other day means that we can expect Peres to urge more concessions for the sake of attaining a cease-fire. He will recommend that Israel demonstrate more patience and understanding for how difficult it is for the PA to impose its authority on the terror organizations. He will also call for a curtailing of Israeli military operations. Ben-Eliezer will do his best to make Zinni's mission a success, both because he wants to see an end to the mutual bloodletting, and because he wants to avoid discord with the U.S. But the reasoning that impelled him to criticize Sharon's order to move tanks closer to the center of Ramallah will bind him in other ways: A defense minister who views everything in terms of the attainment of a cease-fire necessarily hurts his ability to order the IDF to act aggressively, since every serious military move ostensibly has the opposite of the desired effect of alleviating the violence.

This contradiction was already apparent two days ago, when Ben-Eliezer prevented the IDF from catching suspects who had taken refuge in Arafat's compound in Ramallah, and it will come into play when Zinni presents his demands to both sides. The Labor ministers' stance has led some right-wing ministers to suspect that behind the change in the American approach stands none other than Shimon Peres.

3. Equal rights

Official Jerusalem pretended that it wasn't upset about the U.S.-inspired UN Security Council resolution this week, which not so incidentally called for the establishment of a Palestinian state alongside Israel. It repeats the wording of Resolution 242, as far as the right of every state in the region "to live in peace within secure and recognized boundaries," the government spokespeople consoled themselves. Likud ministers pointed out that Sharon himself had expressed recognition of the fact that a Palestinian state will be created. The American involvement in the resolution was portrayed as nothing to get too worked up about, and explained in the context of Vice President Cheney's trip to the region and the administration's effort to enlist the support of the Arab world for its plans to topple Saddam Hussein.

In fact, the role the American delegation at the UN played in formulating the resolution reflects the new line being taken by the administration, which appears to be moving further and further away from the Israeli position. This is a significant political victory for the Arab world and Yasser Arafat: They have succeeded in cracking the united American-Israeli front. Ariel Sharon will have to ask himself how much his tendency to act unrestrainedly, without knowing when to stop, contributed to this.

Minister Dan Meridor's interpretation of the Security Council resolution makes the complacency of the official Israeli response to it hard to fathom. The resolution puts Israel and the future Palestinian state on a equal footing, Meridor said two days ago. According to its wording, both have the right to live within secure and recognized borders. Thus, the security interests of the Palestinian state are of equal weight to Israel's security needs. This symmetry will become a cudgel wielded against Israel: In all the discussions about this issue up to this point, it was a given that the Palestinian state would be demilitarized. Moreover, Resolution 242 referred only to Israel when it said that the agreed-upon border would have to ensure its security. Now the principle of mutuality has been introduced, with the call for secure borders for both Israel and the Palestinian state.

4. A sudden growth spurt

This week, the government decided to compensate business owners in downtown Jerusalem who have been hit hard by the ongoing terror: They will be given discounts of between 20-50 percent in their arnona (municipal tax) bills. The idea was promoted by the municipality, discussed by the ministerial committee for Jerusalem, which is headed by Eli Suissa, and then brought to the Knesset for approval. Along the way, downtown Jerusalem somehow experienced a sudden growth spurt.

In its official announcement, the government said that downtown "is an area approximately 500 meters in length (from the Russian Compound to Mahane Yehuda) and approximately 400 meters in width (from Beit Yisrael Street to the Ben-Yehuda pedestrian mall)." Thus, most of the ultra-Orthodox neighborhoods north of the center, including Mea She'arim, Geula and Beit Yisrael, were annexed to Jerusalem's main commercial district.

The Finance Ministry and Minister Suissa's office claimed this week that it was the municipality that defined the business district. The municipality says that the government decision does not define the borders of downtown and emphasizes that the discount will only be given to business owners, that it does not apply to the arnona tax on residences. Avraham Birnbaum, whose full title is chairman of the Israel Merchants' Organizations and secretary-general of the Jerusalem Merchants' Organization, said that the definition should apply to more streets.