The death of 20 people celebrating the start of Passover on March 27 at the hands of a Hamas suicide bomber will inevitably meet with brutal Israeli retaliation. The Israeli cabinet was meeting Thursday night to discuss its response, amidst appeals by the major powers for restraint.

Even before this horrific incident, US efforts to force a ceasefire and a possible settlement between Israel and the Palestine Authority (PA) were in serious trouble. On the day that the Bush administration wanted attention to focus on the Arab Summit’s adoption of a Saudi proposal to recognise Israel in return for its acceding to the formation of a Palestinian state, Israel’s Police Minister Uzi Landau called for the PA regime to be destroyed. For its part the PA regime condemned the bombing and pledged a series of arrests of leading Islamic militants.

The bombing, which injured 130 hotel guests sitting down to a Seder meal in the northern resort of Netanya, is not in itself decisive in determining the fate of the latest peace initiative and preparing a possible escalation in hostilities. Three related political factors can be identified in this respect: Firstly, the peace initiative rested on the ability of the US to act as its enforcer and guarantor. Secondly, it required the agreement of the Likud-Labour government of Ariel Sharon to abide by US dictat. And thirdly, it needed PA chairman Yasser Arafat and the Arab bourgeois regimes to secure the acquiescence of the Palestinian and Arab masses.

The Bush administration believed that it could force all concerned parties to resume negotiations essentially by the simple expedient of throwing its considerable military and economic weight around. Instead what has been revealed is a full-blown crisis of its Mideast policy.

The US has functioned as the key supporter of the Sharon government in its military efforts to destroy the PA regime. But it was forced to make efforts to reign-in Israel due to the need to secure the agreement of the Arab regimes to a renewal of the war against Iraq.

It has not proved possible to simply engineer such a U-turn in US-Israeli relations. The Bush administration has spent months cultivating a militaristic government, with a social base amongst the settlers and other Zionist zealots who will brook no retreat from a final settling of accounts with the Palestinian masses.

Sharon was to some extent forced on to a back foot by US pressure, but he never abandoned his course. Even the tactical manoeuvres he has made have produced an angry response on the far-right of his government, but the Israeli leader made clear his intention to sabotage the US initiative. He carried on with military operations on the West Bank and Gaza Strip despite a nominal ceasefire. In discussions with US Mideast envoy Anthony Zinni, Sharon held fast to his insistence that Arafat secure an end to all armed resistance to Israel before agreeing to negotiations. He and his spokesmen also rejected any retreat to the pre-1967 borders of Israel and other stipulations contained within the Saudi plan.

In a series of provocations, Arafat was refused permission to attend the Lebanon summit, unless he met Israeli demands. Sharon also insisted the US must guarantee that if any terror attacks took place while Arafat was in Beirut, Israel would not have to allow him to return to the Palestinian territories. Sharon then proposed his own supposed three-stage “peace plan” and demanded the right to present it to the Lebanon summit he was denying Arafat the right to attend!

In an interview with the US magazine Newsweek, Sharon said, “I told US officials in recent meetings that ’there is a conflict between America’s need to establish a coalition [to fight Iraq] and our need to fight Palestinian terrorism.’ [I said,] ‘Don’t take any steps that might undermine the future security of the state of Israel... You will go home, and we will have to stay here facing these dangers.”

Sharon refused to back down, even in the face of two phone calls from US Secretary of State Colin Powell and by United Nations Secretary-General Kofi Annan. The Israeli regime relies on US patronage, but Sharon’s bold calculations were based in large part on his understanding that a significant section of the Bush administration, including Secretary of Defense Donald Rumsfeld, are arguing for relations with Arafat to be broken off and for the US to link its planned war against Iraq with possible military action against Iran and support for an Israeli war against the Palestinians.

The issue has become the focus of longstanding conflicts between the Pentagon and the State Department, led by Powell. Though the initiative in support of the Saudi plan was mounted, including the dispatch of Zinni and Vice President Dick Cheney, it was a confused mess. At the very least the signals sent out to Israel and Palestine were mixed and at worst were openly provocative.

Cheney refused to even meet with Arafat, prompting President Bush to comment that such a meeting would only take place “if and when Arafat performs.”

By far the most ominous development for the future was the report published by the New York Times on March 24 citing joint allegations by Israeli and US intelligence officials of Arafat having, “forged a new alliance with Iran that involves Iranian shipments of heavy weapons and millions of dollars to Palestinian groups that are waging guerrilla war against Israel.”

The report cited the seizure of the Karine A ship in January, which Israel claims was loaded with Iranian weaponry, as being part of a broader agreement between Tehran and the PA arrived at in Moscow last May.

American officials were also cited as being “worried by intelligence reports that say Tehran is harboring Al Qaeda members” and heavily implying broader “cooperation on terrorism against the United States and its allies.”

Sharon could clearly count on a significant lobby in Washington urging the Bush administration to fall in line behind his efforts to link Israel’s war against the PA with America’s supposed “war on terrorism” and to abandon its recent efforts to placate Arab opinion.

Even without Sharon’s efforts, the Arab leaders were facing tremendous political difficulties in meeting up to US demands for a settlement with Israel. The cynical character of the US policy change—its plans to carry out a wider war in the Middle East, coupled with its past support for Israel’s repression of the Palestinians—has fueled the bitterness and anger felt by the Arab masses.

On Sunday March 24, just before the summit was due to take place, a massive protest estimated to be over one million strong took place in the Syrian capital of Damascus, to oppose Saudi Arabia’s proposed normalisation of relations with Israel. The Syrian regime was most critical of the Saudi initiative.

The two-day summit took place as planned and approved the Saudi proposal, but it still carries little weight. Arafat was prevented from making a televised address to the conference on the first day by its Lebanese hosts, prompting an angry walkout by the Palestinian delegation. In total, out of 22 Arab League states, a dozen leaders were absent including America’s key allies, President Hosni Mubarak of Egypt and King Abdullah II of Jordan. Both states have signed peace treaties with Israel, but Mubarak, in a clear signal to the US of Arab disaffection, said he no longer had any confidence in the Israelis.

Crown Prince Abdullah of Saudi Arabia was forced to strengthen his original proposals by insisting on complete Israeli withdrawal from all the Occupied Territories, the ceding of East Jerusalem as the capital of a Palestinian state and considering the right of return to Israel for Palestinian refugees. He explicitly attacked Sharon, stating, “I found out that everyone wants this proposal except for one person.”

To make matters worse for the US the summit also stressed the Arab powers “total rejection of any attack on Iraq”. At the summit Iraq had signaled a rapprochement with Kuwait, in return for which the summit called for the immediate lifting of sanctions and “welcomed Iraq’s confirmation to respect the independence, sovereignty and security of the state of Kuwait”.

Sharon’s government dismissed the summit declaration out of hand as a “non starter” that would mean “the destruction of the state of Israel”. Its full answer will be measured by the severity of its response to the Hamas bombing, which is expected to be exceedingly violent. Fears of an immediate invasion of Ramallah have already prompted Arafat to promise an immediate and unconditional ceasefire.