Abir Dandis, the mother of the two girls who were murdered in the Negev town of Al-Fura’a last week, couldn't find a police officer to listen to her warnings, neither in Arad nor in Ma’ale Adumim. Both police stations operate in areas where Israel wants to gather the Bedouin into permanent communities, against their will, in order to clear more land for Jewish communities. The dismissive treatment Dandis received shows how the Bedouin are considered simply to be lawbreakers by their very nature. But as a resident of the West Bank asking for help for her daughters, whose father was Israeli, Dandis faced the legal-bureaucratic maze created by the Oslo Accords.

The Palestinian police is not allowed to arrest Israeli civilians. It must hand suspects over to the Israel Police. The Palestinian police complain that in cases of Israelis suspected of committing crimes against Palestinian residents, the Israel Police tend not to investigate or prosecute them.

In addition, the town of Al-Azaria, where Dandis lives, is in Area B, under Palestinian civilian authority and Israeli security authority. According to the testimony of Palestinian residents, neither the IDF nor the Israel Police has any interest in internal Palestinian crime even though they have both the authority and the obligation to act in Area B.

The Palestinian police are limited in what it can do in Area B. Bringing in reinforcements or carrying weapons in emergency situations requires coordination with, and obtaining permission from, the IDF. If Dandis fears that the man who murdered her daughters is going to attack her as well, she has plenty of reason to fear that she will not receive appropriate, immediate police protection from either the Israelis or the Palestinians.

Dandis told Jack Khoury of Haaretz that the Ma’ale Adumim police referred her to the Palestinian Civil Affairs Coordination and Liaison Committee. Theoretically, this committee (which is subordinate to the Civil Affairs Ministry) is the logical place to go for such matters. Its parallel agency in Israel is the Civilian Liaison Committee (which is part of the Coordination and Liaison Administration - a part of the Civil Administration under the Coordinator of Government Activities in the Territories).

In their meetings, they are supposed to discuss matters such as settlers’ complaints about the high volume of the loudspeakers at mosques or Palestinians’ complaints about attacks by settlers. But the Palestinians see the Liaison Committee as a place to submit requests for permission to travel to Israel, and get the impression that its clerks do not have much power when faced with their Israeli counterparts. In any case, the coordination process is cumbersome and long.

The Palestinian police has a family welfare unit, and activists in Palestinian women’s organizations say that in recent years, its performance has improved. But, as stated, it has no authority over Israeli civilians and residents. Several non-governmental women’s groups also operate in the West Bank and in East Jerusalem, and women in similar situations approach them for help. The manager of one such organization told Haaretz that Dandis also fell victim to this confusing duplication of procedures and laws. Had Dandis approached her, she said, she would have referred her to Adalah, the Legal Center for Arab Minority Rights in Israel, which has expertise in navigating Israel’s laws and authorities.

John Kerry revealed his long-awaited plan for peace in the Middle East on Sunday, hinging on a $4bn (£2.6bn) investment in the Palestinian private sector.

The US secretary of state, speaking at the World Economic Forum on the Jordanian shores of the Dead Sea, told an audience including Israeli president Shimon Peres and Palestinian leader Mahmoud Abbas that an independent Palestinian economy is essential to achieving a sustainable peace.

Speaking under the conference banner "Breaking the Impasse", Kerry announced a plan that he promised would be "bigger, bolder and more ambitious" than anything since the Oslo accords, more than 20 years ago.

Tony Blair is to lead a group of private sector leaders in devising a plan to release the Palestinian economy from its dependence on international donors. The initial findings of Blair's taskforce, Kerry boasted, were "stunning", predicting a 50% increase in Palestinian GDP over three years, a cut of two-thirds in unemployment rates and almost double the Palestinian median wage. Currently, 40% of the Palestinian economy is supplied by donor aid.

Kerry assured Abbas that the economic plan was not a substitute for a political solution, which remains the US's "top priority".

Peres, who had taken the stage just minutes before, also issued a personal plea to his Palestinian counterpart to return to the negotiations.

"Let me say to my dear friend President Abbas," Peres said, "Should we really dance around the table? Lets sit together. You'll be surprised how much can be achieved in open, direct and organised meetings."

Thick locks hug the front gates of shuttered shops, now covered in graffiti and dust from lack of use. Only a handful of customers pass along the dimly lit road, sometimes stopping to check the ripeness of fruits and vegetables, or ordering meat in near-empty butcher shops.

“All the shops are closed. I’m the only one open. This used to be the best place,” said 64-year-old Mustafa Sunocret, selling vegetables out of a small storefront in the marketplace near his family’s home in the Muslim quarter of Jerusalem’s Old City.

Amidst the brightly coloured scarves, clothes and carpets, ceramic pottery and religious souvenirs filling the shops of Jerusalem’s historic Old City, Palestinian merchants are struggling to keep their businesses alive.

Faced with worsening health problems, Sunocret told IPS that he cannot work outside of the Old City, even as the cost of maintaining his shop, with high electricity, water and municipal tax bills to pay, weighs on him.

“I only have this shop,” he said. “There is no other work. I’m tired.”

Abed Ajloni, the owner of an antiques shop in the Old City, owes the Jerusalem municipality 250,000 Israeli shekels (68,300 U.S. dollars) in taxes. He told IPS that almost every day, the city’s tax collectors come into the Old City, accompanied by Israeli police and soldiers, to pressure people there to pay.

“It feels like they’re coming again to occupy the city, with the soldiers and police,” Ajloni, who has owned the same shop for 35 years, told IPS. “But where can I go? What can I do? All my life I was in this place.”

He added, “Does Jerusalem belong to us, or to someone else? Who’s responsible for Jerusalem? Who?”

Illegal annexation

Israel occupied East Jerusalem, including the Old City, in 1967. In July 1980, it passed a law stating that “Jerusalem, complete and united, is the capital of Israel”. But Israel’s annexation of East Jerusalem and subsequent application of Israeli laws over the entire city remain unrecognised by the international community.

Under international law, East Jerusalem is considered occupied territory – along with the West Bank, Gaza Strip and Syrian Golan Heights – and Palestinian residents of the city are protected under the Fourth Geneva Convention.

Jerusalem has historically been the economic, political and cultural centre of life for the entire Palestinian population. But after decades languishing under destructive Israeli policies meant to isolate the city from the rest of the Occupied Territories and a lack of municipal services and investment, East Jerusalem has slipped into a state of poverty and neglect.

“After some 45 years of occupation, Arab Jerusalemites suffer from political and cultural schizophrenia, simultaneously connected with and isolated from their two hinterlands: Ramallah and the West Bank to their east, West Jerusalem and Israel to the west,” the International Crisis Group recently wrote.

Israeli restrictions on planning and building, home demolitions, lack of investment in education and jobs, construction of an eight-foot-high separation barrier between and around Palestinian neighbourhoods and the creation of a permit system to enter Jerusalem have all contributed to the city’s isolation.

Formal Palestinian political groups have also been banned from the city, and between 2001-2009, Israel closed an estimated 26 organisations, including the former Palestinian Liberation Organisation headquarters in Jerusalem, the Orient House and the Jerusalem Chamber of Commerce.

Extreme poverty

Israel’s policies have also led to higher prices for basic goods and services and forced many Palestinian business owners to close shop and move to Ramallah or other Palestinian neighbourhoods on the other side of the wall. Many Palestinian Jerusalemites also prefer to do their shopping in the West Bank, or in West Jerusalem, where prices are lower.

While Palestinians constitute 39 percent of the city’s population today, almost 80 percent of East Jerusalem residents, including 85 percent of children, live below the poverty line.

“How could you develop [an] economy if you don’t control your resources? How could you develop [an] economy if you don’t have any control of your borders?” said Zakaria Odeh, director of the Civic Coalition for Palestinian Rights in Jerusalem, of “this kind of fragmentation, checkpoints, closure”.

“Without freedom of movement of goods and human beings, how could you develop an economy?” he asked.

“You can’t talk about independent economy in Jerusalem or the West Bank or in all of Palestine without a political solution. We don’t have a Palestinian economy; we have economic activities. That’s all we have,” Odeh told IPS.

Israel’s separation barrier alone, according to a new report by the United Nations Conference on Trade and Development (UNCTD), has caused a direct loss of over one billion dollars to Palestinians in Jerusalem, and continues to incur 200 million dollars per year in lost opportunities.

Israel’s severing and control over the Jerusalem-Jericho road – the historical trade route that connected Jerusalem to the rest of the West Bank and Middle East – has also contributed to the city’s economic downturn.

Separation of Jerusalem from West Bank

Before the First Intifada (Arabic for “uprising”) began in the late 1980s, East Jerusalem contributed approximately 14 to 15 percent of the gross domestic product (GDP) in the Occupied Palestinian territories (OPT). By 2000, that number had dropped to less than eight percent; in 2010, the East Jerusalem economy, compared to the rest of the OPT, was estimated at only seven percent.

“Economic separation resulted in the contraction in the relative size of the East Jerusalem economy, its detachment from the remaining OPT and the gradual redirection of East Jerusalem employment towards the Israeli labour market,” the U.N. report found.

Decades ago, Israel adopted a policy to maintain a so-called “demographic balance” in Jerusalem and attempt to limit Palestinian residents of the city to 26.5 percent or less of the total population.

To maintain this composition, Israel built numerous Jewish-Israeli settlements inside and in a ring around Jerusalem and changed the municipal boundaries to encompass Jewish neighbourhoods while excluding Palestinian ones.

It is now estimated that 90,000 Palestinians holding Jerusalem residency rights live on the other side of the separation barrier and must cross through Israeli checkpoints in order to reach Jerusalem for school, medical treatment, work, and other services.

“Israel is using all kinds of tools to push the Palestinians to leave; sometimes they are visible, and sometimes invisible tools,” explained Ziad al-Hammouri, director of the Jerusalem Centre for Social and Economic Rights (JCSER).

Al-Hammouri told IPS that at least 25 percent of the 1,000 Palestinian shops in the Old City were closed in recent years as a result of high municipal taxes and a lack of customers. “Taxation is an invisible tool…as dangerous as revoking ID cards and demolishing houses,” he said. “Israel will use this as pressure and as a tool in the future to confiscate these shops and properties.”

Freezing the expansion of Jewish settlements in the West Bank was once seen as a unilateral Israeli obligation. But the Obama administration is now treating this as part of a package that will require concessions from Arab states as well.

An intensified and more public focus on this idea appears to be one of the byproducts of U.S. President Barack Obama's July 13 pledge to American Jewish communal representatives to address perceptions that he is pressuring only Israel.

So far, the Arabs have been resistant. Still, in the wake of Obama's White House meeting with the Jewish delegation, Israeli, American and Arab leaders have, to varying degrees, shifted their rhetoric in ways that reflect acceptance of a new principle of reciprocity.

"The Americans now understand that if they get anything from us on the settlement issue, it will only be in the broader context of some kind of Arab return," said an Israeli diplomat, echoing other similar comments from Israeli officials recently. The official added that talks between U.S. Mideast envoy George Mitchell and Defense Minister Ehud Barak have focused on components of a two-sided deal that will include both a settlement freeze and reciprocal steps by Arab countries.

Secretary of State Hillary Clinton appeared to confirm this in a policy speech two days after Obama's White House meeting with the Jewish representatives.

"Progress toward peace cannot be the responsibility of the United States - or Israel - alone," Clinton told the Council on Foreign Relations. "Arab states have a responsibility to support the Palestinian Authority with words and deeds, to take steps to improve relations with Israel and to prepare their publics to embrace peace and accept Israel's place in the region."

A U.S. State Department official told the Forward that steps by the Arab parties were fundamental to Mitchell's mission.

"Special envoy Mitchell continues to engage in constructive conversations with all parties, including Israel, the Palestinians and the Arab states, on steps they could take to help create a climate in which to re-launch negotiations," he said.

At least some Arab parties to the peace process also now appear to accept this.

"The price we pay will depend on what kind of a deal we get on the settlement issue," said an Arab diplomat in response to questions about Israel's stand. "In return for a symbolic compromise on the settlements, some Arab states will be willing to pay with some symbolic gestures."

But so far, the Obama administration appears stymied in its efforts to obtain a commitment to new concessions toward Israel by Arab states, even in the event of an Israeli commitment - nonexistent up to now, even conditionally - to a settlement freeze.

The administration has been frustrated in particular in its quest for flexibility from Saudi Arabia. According to experts and diplomats, tensions between Washington and Riyadh were building even prior to Obama's meeting with Jewish leaders, as a result of a June 3 meeting between Obama and King Abdullah in the Saudi capital. The meeting ended with a clear disagreement over the issue of Israel.

"Why should the king of Saudi Arabia, who is the leader of the Muslim world and the imam of his Muslim community, give something of this nature to the Israelis for free?" asked Jamal Khashoggi, editor-in-chief of the Saudi daily newspaper Al-Watan. "This is a new idea that was probably developed by Israel's friends in Washington."

Khashoggi said the Saudi monarch believes his 2002 peace initiative, supported by the entire Arab League, already offered concessions and showed the kingdom's wish for peace.

Israel never responded to the Saudi initiative. But in her speech to the Council on Foreign Relations, Clinton said that embracing the 2002 Arab peace plan is not enough, and that concrete initial steps are needed now.

The initiative, which Obama has cited as a helpful basis for discussion, commits the Arab world to an official peace agreement with Israel and normalized relations with it if Israel withdraws to its pre-1967 borders, accepts the establishment of a Palestinian state and resolves the issue of Palestinian refugees in accordance with United Nations resolutions.

Those U.N. resolutions, however, appear to require the refugees' return to homes in present-day Israel, constituting one of Israel's principal objections to the proposal.

No handshakes or visas

America's request for signs of normalization with Israel is now focused on symbolic steps. According to Arab and American diplomatic sources, Washington is now asking for the reopening of commercial interest offices of Oman, Qatar and Morocco in Israel and for permission for Israeli commercial airliners to fly over Gulf states, shortening flights from Israel to East Asia by several hours. Public overtures, such as a handshake with Israeli leaders, or providing tourist visas to Israelis seeking to visit Arab countries, are not on the table now, said an Arab diplomat with close knowledge of the talks. The diplomat stressed that such public gestures are viewed as being at the top of the scale of normalization and therefore will be kept for the final phase of the peace process.

"The Arab consensus is that normalization is the last card they have to play," the diplomat said.

Prior to the emerging emphasis on reciprocity, Israel's obligation to freeze the expansion of Jewish settlements in the West Bank was understood to be an independent requirement of the so-called road map for Middle East peace. The 2002 road map, forged by the Bush administration with international partners, required Israel to "immediately" dismantle settlement outposts that even Israel classifies as unauthorized, and to freeze all settlement activity, including natural growth.

The road map also requires the Palestinians to take concrete steps to halt terrorism and violence. But this, too, appears as an independent obligation, untied to any action by Israel.

The new Sadat

The most significant sign thus far of Arab willingness to adopt America's call for normalization has come from the small Gulf kingdom of Bahrain. In a July 16 op-ed published in The Washington Post, Sheikh Salman bin Hamad al-Khalifa, the Bahraini crown prince, called on Arab countries to reach out and communicate with Israel.

"Essentially, we have not done a good enough job demonstrating to Israelis how our initiative can form part of a peace between equals in a troubled land holy to three great faiths," Khalifa wrote.

He went on to criticize Arabs who wish to perpetuate the Israeli-Palestinian conflict so that Palestinian victims "can be manipulated as proxies." The Bahraini leader also urged Arabs not to waste more time in waiting for Israelis to take the first step, calling this approach "small-minded."

Samuel Lewis, a former American ambassador to Israel who was directly involved in the Israeli-Egyptian peace talks in the late 1970s, equated Khalifa's article to peace gestures made by Egyptian president Anwar Sadat before signing the treaty with Israel 30 years ago.

"This is exactly the kind of message that an Arab leader gives both to the United States while at the same time aiming at other Arab leaders," Lewis said in a July 17 conference call organized by Israel Policy Forum.

But Bahrain is still a lone voice among Arab countries. Letters that Obama sent out in June to Arab leaders calling on them to be forthcoming in the peace process have remained largely unanswered. This prompted the president to reportedly state, in his meeting with Jewish leaders, that "there is not much courage" within the Arab leadership.

Experts argue that the roots of the disagreement with Saudi Arabia, considered a linchpin for progress, go deeper.

Jon Alterman, director of the Middle East program at the Center for Strategic and International Studies in Washington, said the Saudis are disappointed with many aspects of Obama's policy: His drive for ending America's dependency on foreign oil, the decision not to appoint a close confidant as ambassador to Saudi Arabia and choosing the route of diplomatic engagement with Iran.

"There is a Saudi feeling that this administration does not recognize the importance of Saudi Arabia and does not appreciate them," Alterman said.

For the first time in America's decades of jousting with Israel over West Bank settlements, an American president seems to have succeeded in isolating the settlements issue and disconnecting it from other elements of support for Israel.

It is a disentanglement now seen most clearly in Congress, which in the past served as Israel's stronghold against administration pressure on the issue. But when Israeli leader Benjamin Netanyahu came to Capitol Hill for a May 18 meeting after being pressed by President Obama to freeze the expansion of West Bank settlements, he was "stunned," Netanyahu aides said, to hear what seemed like a well-coordinated attack against his stand on settlements. The criticism came from congressional leaders, key lawmakers dealing with foreign relations and even from a group of Jewish members.

They included Massachusetts Democrat John Kerry, who heads the Senate Foreign Relations Committee; Democrat Carl Levin of Michigan, who chairs the Senate Armed Services Committee; California Democrat Howard Berman, chairman of the House Foreign Relations Committee, and California Rep. Henry Waxman, a senior Democrat.

The Jewish lawmakers among them believed "it was their responsibility to make him [Netanyahu] very, very aware of the concerns of the administration and Congress," said a congressional aide briefed on the meeting. The aide, who declined to be identified, stressed that despite the argument on settlement issues, members of Congress remained fully supportive of Israel on all other issues, including the need to deal with Iran and the concern over Hamas and Hezbollah's activity.

In their meetings, according to the congressional aide, lawmakers rejected Netanyahu's call for Palestinian reciprocity on terrorism as a precondition and kept pressing him on the need to stop building in settlements.

Another staffer on Capitol Hill however, stressed that the heated atmosphere should not be interpreted as a sign of a breakdown in relations. "Jewish members," the staffer said, "express their views very freely" when meeting with Israeli leaders, and did so with Netanyhau's predecessors as well.

The Israeli prime minister also found little support for his position on settlements from the organized Jewish community. Jewish communal groups have largely remained silent and did not spring to Netanyahu?s defense.

"Even the most conservative institutions of Jewish American life don't want to go to war over settlement policy," said David Twersky, who was until recently the senior adviser on international affairs at the American Jewish Congress. "They might say the administration is making too much of a big deal of it, but they will not argue that Jews have the right to settle all parts of Eretz Yisrael [the Land of Israel]."

The single voice backing Netanyahu's policy among groups with the Conference of Presidents of Major American Jewish Organizations - the umbrella organization of Jewish groups - was that of the Zionist Organization of America, which denounced the administration's demands as "illogical, unjust and dangerous."

The renewed clash over settlements surfaced following Netanyahu's May 18 meeting with Obama, when it became clear that the new administration was trying to redefine the discussion at a time when pro-settler political parties play a prominent role in Israel's governing coalition. Obama sought a comprehensive settlement freeze from Israel as part of a White House effort to restart a dormant peace process, which, in turn, is part of a larger strategic project: bringing together Israel and its Arab adversaries to resist a threat from Iran as it pursues nuclear capabilities.

Netanyahu rejected this linkage and America's demand for a settlement freeze, arguing that it should not include "natural growth" - defined as population growth from within and territorial expansion by already established large settlement blocs expected to remain under Israeli rule in a final-status agreement.

But a recent report by Israel's Peace Now organization, which monitors settlement activity, found that more than a third of new units built in established settlements in recent years are used to absorb newcomers rather than to accommodate internal growth.

Obama did not address the natural growth dispute publicly after his meeting with Netanyahu, but a harsh and clear statement by Secretary of State Hillary Rodham Clinton in an interview with the Al-Jazeera network made it clear that Netanyahu's view was unacceptable. "We want to see a stop to settlement construction, additions, natural growth - any kind of settlement activity," she said.

The position was not new. The so-called "road map" peace plan - a broad multi-step process first outlined in 2002 - calls for a complete settlement freeze by Israel, "including natural growth of settlements" as one of the first steps to be taken.

Netanyahu was publicly silent on the issue during his stay in Washington. But on returning home, he defiantly told his Cabinet, "The demand for a total stop to building is not something that can be justified, and I don't think that anyone here at this table accepts it."

That was certainly true for Defense Minister Ehud Barak of the usually more dovish Labor Party.

"We need to find a way to explain to the Americans that there is no link between outposts and Iran," Barak told Israeli reporters. "It's not as though the minute an illegal outpost is dismantled, the Iranians will abandon their nuclear aspirations. Therefore, these issues must not be directly hinged on one another."

On May 26, Netanyahu sent a team headed by Cabinet minister Dan Meridor to convey this message to American special envoy George Mitchell and to offer a new deal in which Israel will dismantle illegal outposts in return for American consent to continue building for natural growth needs.

Israel first promised to dismantle the illegal outposts in 2003, when then-prime minister Ariel Sharon gave a similar commitment to Bush.

Jerusalem - The summer tour season to Israel for American politicians reached its peak this month, with nearly 10% of the House of Representatives visiting Jerusalem in the past two weeks. Forty Republicans and Democrats met with Israeli and Palestinian leaders in two separate rounds of intensive touring mixed with high-level policy meetings.

This year’s tours came at a crucial moment, as Congress is considering a massive and controversial arms deal proposed by the White House and aimed at both Israel and Saudi Arabia. In addition, American policymakers are readying for an international summit in November that will deal with the situation in the Middle East. The Congressional trips, sponsored by pro-Israeli groups, have become one of the main attractions offered during the summer recess. “They have us on our feet at 8 o’clock in the morning, and we run around until late at night,” said one of the staff members accompanying the members of Congress.

For first-time congressman Paul Hodes, the visit was also a chance to get a closer look at the Jewish state. Hodes, the first Jewish congressman to represent New Hampshire, had never visited Israel. “This is my first trip outside the United States as a congressman, and I’m happy it is to Israel,” Hodes said while walking to a quick lunch, after which he headed out for a bus tour. “As someone who follows the issue for many years, I was especially interested in coming here.” On a hot Tuesday morning, 18 Democrats — most of them members of the 2006 freshman class — mounted a tour bus on their way to Ramallah for a meeting with the new Palestinian prime minister, Salam Fayyad. Dressed in khakis and sport jackets — the preferred attire for an adventure in the Levant — Democratic members of Congress returned from their trip to the Palestinian territories with a clear sense of excitement over the new Palestinian leadership. “I think that the leadership of Mr. Abbas and Mr. Fayyad gives reason for hope,” said House majority leader Steny Hoyer, who led the Democratic delegation. “We are hopeful that history proves that we have come to a time where the leadership of the Palestinian people has determined that terrorism is not acceptable as a policy.” The high spirits among the Democrats stood in contrast to conclusions reached by some Republican congressmen, who visited the region a week earlier. House deputy minority whip Eric Cantor became the first American lawmaker to criticize Fayyad after learning that the Palestinian leadership may have provided assistance to Hamas members. Cantor wrote a letter saying that he would warn other American lawmakers that talks with the Palestinian government “offer little value.” The congressional trips to Israel were organized and sponsored by the American Israel Education Foundation, an offshoot of the American Israel Public Affairs Committee that focuses on taking political leaders and staff members on educational visits to Israel. The separate group was formed in order to maintain the separation between Aipac’s lobbying operation and the educational foundation that sends lawmakers on all-expense-paid tours.

In organizing the visits, AIEF built two itineraries that were almost identical, yet totally separate for members of the two parties. Both delegations roamed Israel and the Palestinian territories in parallel tours, with one group ending its visit a day before the other one landed.

Palestinian President Mahmoud Abbas sent last-minute cancellation notices to both the Republican and the Democratic delegations that came to Ramallah. In the first case, he left for consultations abroad; regarding the Democrats, he begged out with the flu. Abbas’s absence turned over the spotlight to Fayyad, who enjoys significant popularity among American lawmakers and policy officials because of his moderate political views and his efforts to install good governance, accountability and transparency in the Palestinian Authority.

Fayyad, who became second in the P.A. hierarchy after the fallout between Fatah and Hamas, managed to charm lawmakers from both parties who visited him in Ramallah. Democratic and Republican staff members said that Fayyad came across as a straight talking, down-to-earth partner, a stark contrast to the experience that some of the veteran lawmakers have had with former Palestinian president Yasser Arafat. “He’s honest; he’s not a politician,” Hoyer told the Forward after the meeting.

While the delegations may have covered similar territory, they did not draw similar conclusions on the impending policy matters. On the Israel-Palestinian peace process, it was the Democrats who appeared to be closer to the Israeli government. According to attending government sources, in meetings with the lawmakers, Prime Minister Ehud Olmert and Foreign Minister Tzipi Livni stressed the need to support the Abbas government and to strengthen Fatah.

Majority leader Hoyer went so far as to publicly state that “the United States has never opposed the Palestinian people.” He hinted that if the P.A. does curb terrorism, Congress will be willing to consider further financial aid to the Palestinians.

Cantor, who led the Republican delegation, came to very different conclusions a week earlier. A day after meeting with Fayyad, Cantor learned that the P.A. has decided to provide financial assistance to Hamas members. “You can imagine my shock and disappointment,” he said to Abbas in an angrily worded letter. “This came less than 24 hours after you looked me and several other U.S. Congressmen in the eye and vowed that your government would not seek rapprochement with Hamas.” Democratic lawmakers raised Cantor’s complaints with Fayyad, as well as with Israeli and American officials, and heard, according to Hoyer, a unanimous agreement that the payment to Hamas members was merely a bureaucratic mistake that was rectified within less than an hour. “I believe there is no policy by the Palestinian government to support Hamas,” Hoyer said.

On the issue of the new White House arms proposal, it was the Republicans who were on the same page as the Israeli government. The deal would send $20 billion worth of weapons to Saudi Arabia and other Gulf countries, and Olmert has declared that Israel does not view it as a threat.

The Israeli support for selling arms to Saudi Arabia has caused confusion among Jewish groups. Only two organizations have made public statements on the issue: From the right, the Orthodox Union announced it opposes the deal because of the Saudis’ failure to cooperate with the United States on a wide array of issues. On the left, Americans for Peace Now expressed opposition to the deal because it escalates the Middle East arms race. Mainstream Jewish groups have remained silent on this issue.

In Congress, it has been Republicans who have been supportive of the Bush administration plan. Congressional Democrats, on the other hand, have not yet adopted an agreed-upon policy in regard to the arms deal, and have presented a number of different fronts. In Jerusalem, Hoyer tried to remain vague, but Nevada Congresswoman Shelley Berkley said, “I don’t trust the Saudis.” Berkley, who wrote a letter to President Bush demanding that the deal be called off, told the Forward that the Saudi leaders are “deceitful” and “the biggest supporters of terrorism.” The debate over the Saudi arms deal remained the single issue dividing congressional Democrats on their visit.

On the Israeli-Palestinian front, the members adopted a cautiously optimistic line, similar to that now being advocated by Israeli leaders. “I think there is hope,” said Hodes, president of the Democratic freshman class, while stressing that “it is very important to temper optimism with reality and practicality.”

Israeli officials are giving the first signs that they are preparing for negotiations on a final-status peace agreement with the Palestinians.

Both Israelis and Palestinians are readying for an international meeting set to discuss the Middle East conflict in November, but until now the Israelis have been wary of looking at this meeting as an entry point to final-status peace talks.

This week, though, government sources in Jerusalem said that Israel would like to arrive at the conference with an agreement in principle that will define the outlines of a final-status solution without going into specific details.

“We’re not talking about drawing lines on the map yet, but we do want a set of principles which will flesh out the general ideas discussed in previous agreements,” the government source said, speaking on condition of anonymity.

The first signs of the new Israeli stance were seen Monday, when Israeli Prime Minister Ehud Olmert met with Palestinian President Mahmoud Abbas in the West Bank city of Jericho. For years, Israel’s leaders have insisted that meetings take place in Israel, and Olmert’s trip to the Palestinian territories was a symbolic gesture meant to strengthen Abbas. More significant than the location was the promise made by Olmert to discuss “fundamental issues” with his Palestinian counterparts “hoping that this will lead us soon into negotiations about the creation of a Palestinian state,” as Olmert said when entering the meeting.

Previously, Israelis have stressed that the international meeting, scheduled to take place in Washington, would not set the timetable for an Israeli-Palestinian peace agreement. But sources on both sides now agree that the proposed summit has set in motion a frenzy of diplomatic activity aimed at reaching initial understandings before the conference convenes.

The conciliatory attitude being shown by the Israelis extended beyond just talk. On Tuesday, a day after the Jericho meeting, Israeli soldiers forcibly removed two Jewish families from the disputed marketplace in the predominantly Arab West Bank city of Hebron. The operation required hundreds of soldiers, who were met with stone-throwing from settlers. Thirty people were injured, including several policemen. Twelve Orthodox Jewish soldiers refused to take part in the evacuation and were court-martialed.

Also on Tuesday, a top Israeli general announced that Israeli forces would stop conducting training exercises involving populated Arab villages. A human rights group approached the military advocate general in March after several complaints were filed by reserve soldiers serving in paratrooper battalions. The battalions were trained in the capture of villages in the West Bank as well as battle in residential areas. The “dry-run” exercises were carried out without live fire, but nonetheless sparked panic among the residents of the villages.

The advocate general, Avihai Mandelblit, promised a probe of the training exercises and promised that until the completion of the probe, the training would be halted.

After the talks on Monday, Abbas promised that the lives of Palestinians would improve as a result of the Jericho meeting.

“Many issues which affect the Palestinians in their day-to-day lives will be resolved,” Abbas told Voice of Palestine radio in his first public comments after the meeting.

Palestinian officials said they received assurances from Olmert that Israel would approve as early as next week the removal of some of the hundreds of checkpoints, roadblocks and barriers that restrict Palestinian travel in the West Bank.

For the leaders, though, the big question is how far the upcoming peace talks will go. An Israeli government source told the Forward that Jerusalem’s objective is to arrive at the conference with a set of principles that will represent as wide an understanding as possible.

“We want the international meeting to give its blessing to these principles and to encourage both sides to reach further understandings,” the source said.

It is yet to be seen if the promised discussion on core issues will be seen by Arab states as a sufficient effort that would turn the conference into a “substantive” one, as the Saudis have demanded. American diplomats are engaged in talks with the neighboring Arab countries as well as with Israel and the Palestinians in order to formulate a mutually-agreable agenda for the conference. This formula will have to take into consideration, on the one hand, the Arab demand for having final-status talks on the agenda and, on the other, the Israeli concern about the possibility that the solution to the conflict will be turned over to an international forum.

The assistant secretary of state for Near Eastern affairs, David Welch, told reporters this week that there is already “some consensus” on these issues, though there is still much work to be done.

Israeli officials have stressed in recent days that progress in talks toward a final-status agreement is conditioned on the Fatah government refraining from any attempt to rebuild ties with Hamas — the group that now controls Gaza. A national-unity agreement between Fatah and Hamas is viewed by Israel as a potential obstacle that could undermine progress.

In a recent meeting with a foreign diplomat, Israel’s foreign minister, Tzipi Livni, used an example from the Israeli political scene to demonstrate the perils of national unity. “If [former prime minister] Sharon would have agreed to a national unity government, the Gaza disengagement would never have taken place,” Livni told the foreign official, stressing that unity does not necessarily serve the cause of promoting the peace process.