Review of the year: The Middle East

The breakthrough that never arrived

2005 started with high hope and ended in deep doubt. After five years in which Israel had concluded that Yasser Arafat was "not a partner" for peace, the Palestinian public elected a President in Mahmoud Abbas who was unequivocally in favour of a just, lasting and negotiated peace with Israel, and who pulled off a deal with the armed factions which provided for a de facto ceasefire. To many in the international community - and rather fewer in conflict-weary Israel-Palestine - this seemed to herald a real breakthrough, especially when coupled with the clear determination of a strong but apparently changed Israeli Prime Minister Ariel Sharon to withdraw the troops and 8,500 Jewish settlers he had done so much to help install in Gaza.

In neither case, moreover, was this mere rhetoric. The bloodshed did not end with Mr Abbas's January talks with the factions in Gaza, or with the much trumpeted ceasefire summit he held with Mr Sharon in Sharm el-Sheikh last February. Despite it, and the continued construction of the Israeli Army's 450-mile separation barrier snaking in and out of the occupied West Bank, Islamic Jihad was still able to perpetrate three suicide bombings in the second half of the year. According to Israeli security sources, many more bombings were foiled. But Hamas, the faction responsible for hundreds of Israeli deaths in suicide attacks over the past five years, was staying its hand, determined to maximise its electoral base and chastened by the killing of more than 20 Palestinians in Gaza when some of its armaments exploded during a military parade. Israel resumed targeted assassinations, while arrest operations continued to kill Palestinians, not all of them armed militants. But its army refrained from large-scale armoured incursions into either Gaza and the West Bank. Overall deaths from the conflict were dramatically reduced compared with 2004.

And Gaza disengagement, despite all the dire prognoses of the imminent fracture of Israeli society, went ahead without the serious accompanying violence that had been predicted.

What was much less clear after Gaza disengagement in August - an undoubted triumph of peacetime military planning that brought Ariel Sharon widespread international congratulation - was what it meant for the future. In Gaza itself, hundreds of thousands of Palestinians celebrated their new-found freedom to travel from one end of the Strip to another, not to mention large parts of the coast that had been shut off from them by the settlements. But negotiations on easing access to the outside world that Gaza's people wanted, and its goods needed, were painfully slow.

James Wolfensohn, the former head of the World Bank entrusted with the daunting task of ensuring a real chance for Gaza's devastated economy, began to express his private irritation that Israel's preoccupation with security, while valid, was too narrow; more freedom and mobility, the lifeblood of economic wellbeing for Palestinians, could in turn help Israel's long-term security, too. But it still took US Secretary of State Condoleezza Rice a night of negotiations to persuade Israel to agree a schedule for opening the Rafah crossing into Egypt for people, the Karni crossing into Israel for goods, and a regular convoy of buses from Gaza to the West Bank. By mid-December the first two were underway, the third was not.

Israel's security fears were not the only deterrent to economic recovery in Gaza. A spate of low-level kidnappings and lethal tribal wars underlined the political weakness of Abbas's grip on law and order (as well as on much else) - a discouraging prospect for investors. But the Wolfensohn point still had a relevance that went wider than Gaza.

Checkpoints and closures in the West Bank, along with the separation barrier, especially as it snaked round Jerusalem, cutting off the West Bank from the city, continued to erode the economic and social life of Palestinians. It was a matter of debate whether the security gains were not at times outweighed by the long-term risk of fostering economic deprivation and deep resentment among the civilian population. But in any case the year ended dramatically on election footing.

Amir Peretz promised a new future for Labour - and, if elected, talks with the Palestinians - after ousting the octogenarian party leader Shimon Peres; Peres now opportunistically joined Ariel Sharon, who, exasperated by the die-hard right-wing opponents of disengagement, had taken a bold gamble by leaving Likud and forming his own party (taking much of Likud with it) which he named Kadima. It immediately rose to the top of the polls. Likud trailed, at year's end, in third place. On the Palestinian side, Abbas's chances of securing the defeat next month of an electorally strengthening Hamas - which he badly needs to maintain international credibility - risked being dented by a major public split in the dominant Fatah.

Of the three main Israeli party leaders, it was the still most popular, Mr Sharon, whose long-term intentions remained clouded in mystery. Behind his dogged mantra of sticking by the internationally agreed "Road Map" he remained inscrutable. Some Israelis believed, whether wishfully or not, that Mr Sharon had transformed into a statesman and would make offers to the Palestinians it might be hard for them to refuse. Many others, and almost all Palestinians, believed that the best the latter could expect from him was a unilaterally imposed border, annexing East Jerusalem as well as all the biggest settlement blocs, which could not conceivably form the basis of a lasting settlement.

Yet electoral uncertainty, at the year's end, made almost every prediction futile. A benign confluence of a shift to the left in Israeli politics, with Mr Sharon perhaps sharing power after the March polls with Mr Peretz instead of Mr Netanyahu, and a decisive election victory for Mr Abbas, could create a more positive climate than at any time since Camp David. If instead the elections produce a mutually reinforcing relationship in which the Israeli right, set against compromise, and a politically empowered Hamas join in malign symbiosis, hopes of a lasting peace will be more distant than ever.