PLO second thoughts chill Mid-East peace

Arabs are weary of what they believe is a one-sided dialogue with Israel, writes Robert Fisk in Beirut

Yasser Arafat was coming, they said in Cairo last night. It was to be a meeting of both Fatah and the Palestinian Authority, a make-or- break crisis conference to decide the fate of Middle East peace.

Then they said that Farouk Kaddoumi, the Palestine Liberation Organisation's "foreign minister" would not be there. Then they said that Abi Mazen - real name Mahmoud Abbas, the signatory of the White House Declaration of Principles - would not come.

Then there were rumours that the whole conclave would be postponed until the end of the Muslim holy month of Ramadan.

Could anything have more powerfully illustrated the catastrophic decline of the whole peace process - the free-fall into which the Declaration of Principles has plummeted in the past few weeks - than such classic Palestinian indecision? Already, PLO officials around Mr Arafat are saying that a reversion to the terms of the original 1991 Madrid conference - based on implementation of UN Security Council Resolutions 242, 338 and 425, calling for full Israeli withdrawal from occupied Arab land - is the only mechanism that can save the peace of the Middle East. Forget the "final- status" talks, the PLO is now saying; all Jewish settlements must go; east Jerusalem must be the Palestinian capital.

Over the weekend Egypt, Syria and the PLO all independently called upon the United States - a witness but not a guarantor of the PLO-Israeli agreement - to put pressure on Israel to speed up the timetable for Palestinian autonomy and for a total withdrawal from occupied territories.

And each day Egypt's relations with Israel - the "cold peace" as the Israelis and Americans have predictably dubbed this frigid alliance - grows colder. Egypt's demand that Israel sign the nuclear Non- Proliferation Treaty (NPT) has elicited threats from the US that Cairo is "marring" Egyptian-American relations, that Egypt's $2bn (£1.2bn) in foreign aid from the US may be cut back in retaliation for its obstinacy.

Even more depressing in the context of a future Middle East peace, Arab Gulf states are so disillusioned by the peace process that they have decided not to fund the regional Middle East development bank, the institution which President Bill Clinton and the Israelis regarded as a cornerstone of future Arab-Israeli friendship. The scheme, to mesh Israel into the Arab economy, has been suspended by Saudi Arabia and its neighbours until Israeli troops withdraw from the occupied territories. Other Arab states will not be fooled by the decision - the Gulf states are fickle creatures that have smelt something disturbing in the wind - but their refusal to move forward with the development bank quietly eliminates one of the principal economic platforms of the Israeli-American settlement in the Middle East.

In Cairo, the Americans are telling the Egyptians that an extension of the NPT is vital to US "national interests", refusing - according to government officials in Egypt - even to discuss Israel's possession of an estimated 200 nuclear missiles. American correspondents with close relations to the State Department are hard at work producing articles on how Egypt is trying to rock the peace-process boat to recover the prestige it supposedly lost when its pivotal role as a mediator passed to Israel once the Israeli- PLO peace was agreed.

Egypt, the Americans have decided, is trying to find a new identity. But in truth, President Hosni Mubarak's decision to delay signing the NPT - with which Syria agrees - is one of the few decisions he has taken in recent years to received almost total support from the population.

Even armed Islamic opponents of his regime have expressed their approval of Mr Mubarak's stand.

News that the Egyptian Foreign Minister, Amr Moussa, indulged in a shouting match with Shimon Peres, the Israeli Foreign Minister, in Washington over the nuclear treaty has been greeted with satisfaction in an Arab world that has grown ever more weary of a "peace" which the Arabs - in their own eyes - were destined to lose.

On the only Arab-Israeli war front still in existence - in southern Lebanon - the Israeli army chief of staff, General Mordechai Gur, has said Israel will retaliate for a weekend offensive by the pro-Iranian Hizbollah in which 16 military positions held by Israel and its proxy South Lebanon Army militia were attacked.

Lebanon is in the throes of an economic recession as investors consider whether the country's reconstruction depends on a peace agreement with Israel that seems to recede almost daily.