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This happy occasion, on which Ariel Sharon has dropped his demand for seven days of quiet prior to negotiations about a cease-fire, is not the time to settle accounts with him - for refusing to reach the selfsame conclusion during the nine months that went by since George Tenet furnished his plan for easing the Israeli-Palestinian conflict.

However, there is cause to examine the meaning of his concession, and analyze the repercussions it will have in terms of the future of the dispute. One of the last items in the Tenet outline is a sensitive clause that is taken from the Mitchell report, and which bans any sort of construction activity in the settlements.

The leader who surrendered to American pressure on the seemingly formal issue of conducting talks under fire, is likely to be forced soon to discuss the substantive demand for a freeze on the development of Jewish settlements in the territories.

Thus far, Sharon has followed a tactic of playing for time. He has delayed the start of the process which will lead to the implementation of the Mitchell report. He contributed to the continuation and worsening of the armed conflict which has claimed a bloody price from the two sides. His current willingness to show flexibility suggests he has realized that there are limits to his powers, and that his approach up to now has caused damage that exceeds anything it has achieved.

By delaying the Tenet program, Sharon sought to turn off diplomatic instruments that aimed at extricating the Israeli-Palestinian dispute from the blood-soaked impasse in which it has been engaged for the past 18 months. The damage was the continuation of Palestinian terror - the terror exacted a heavy daily price in terms of human life, economic stagnation and national morale. Sharon's system was supposed to produce a specific relation between utility and damage: his method's aim was to gain time, so that the Israel Defense Forces would be able to defeat the Palestinian uprising, at a price which Israel could endure.

The results were not what had been anticipated. As days went by, attacks grew more fierce. Internal processes in Israel and among the Palestinian public complicated matters, making it still more difficult to reach political-diplomatic decisions. The costs kept getting worse. The international community has displayed increasing signs of discontent about what was going on and the moment when it would intervene drew closer.

Sharon must understand that this dynamic will re-occur in days ahead. The balance of power between Israel and the Palestinians is well reflected at the end of this round of conflict, which comes with General Anthony Zinni's return to the region.

On the one hand, there is the Palestinian demand of liberation from the Israeli conquest; on the other hand, there are Israel's security demands.

On the one hand, there is a cruel, indiscriminate terror; on the other hand, the deployment of a well-equipped, trained army which is called on to carry out preventive and punitive steps that deliver hard blows to a civilian population.

On the one hand, there is a demand for a right of refugee return within the border of the Jewish state; on the other hand, there is Israel's demand that the Palestinians become reconciled to the continuing existence of settlements in the heart of the land mass slated for their state.

On the one hand, there is a corrupt, dictatorial regime which is losing its ability to rule; on the other hand, there is a democratic system whose coalition structure thinly coats deep internal fissures which will come to the fore when the dispute with the Palestinians reaches the moment of truth.

The result of these assessment of circumstances on the two sides is a trade-off. Israel has given up its demand for seven days of quiet, and the Palestinians have announced that the third suspect in the murder of Rehavam Ze'evi has been arrested. A compromise is evolving in which Israel is to assume the brunt of the burden, since it retains in its possession the majority of assets that are considered key levers for resolving the dispute.

This dynamic will continue in the future. Israel will be more vulnerable than the Palestinians, its positions will be considered less legitimate, demands that it make concessions will be more forceful, and its ability to compensate the other side will be more palpable. The dispute is not symmetrical - the concessions which Israel will have to make to attain an agreement will be much greater than those demanded of the Palestinian side.

Sharon would do well at this stage to acknowledge these facts, and digest the lessons to be drawn from the chapter in the conflict which ended with his decision to forgo the demand of seven days of quiet.