Adrian Hamilton: Europe does have influence over Israel and should use it now

'Europe has failed to use the trade lever vigorously because its members are too pusillanimous'

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No one believes that the European Union's latest diplomatic initiative has the faintest chance of slowing, let alone stopping, the accelerating descent to catastrophe in the Middle East. The Israeli government, which has always regarded Europe as pro-Palestinian, has no intention of changing the course of its military action for the EU's sake. Indeed, Israel expressed the greatest reluctance yesterday even to allow the EU delegation to meet Yasser Arafat, let alone negotiate truces with him.

Washington doesn't think Brussels has anything to offer, if indeed it even has a common foreign policy worth the name. And the British, always self-regarding in respect of their own role in this part of the world, tend to regard any attempt by Brussels to form a common stance as at best futile and at worst positively malign. If the European initiative launched yesterday has any meaning, it is simply as a desperate gesture to be seen to be doing something. And if it is has any resonance beyond that, it is that neither Washington nor London, nor anyone else, has any better idea.

And yet it is precisely because Europe as an entity is so weak diplomatically that it may ultimately be most useful in the Middle East. For years the accusation against Brussels was that it had economic clout worldwide but was unable to translate this into political influence. Too true. But the problem in the Middle East is that there has been far too much diplomacy and far too little hard understanding.

Ever since Margaret Thatcher fell for the charms of Shimon Peres and King Hussein of Jordan, British prime ministers have been carried away with the idea that they could broker a peace between Israel and the Arab world. With Tony Blair, the field has widened to include the young President Assad of Syria and the new King Abdullah of Jordan. But the theme has been the same. The Middle East is a bubbling war between states that has to be defused by traditional means.

Even today, when the reality should be clear for all to see, the same mind-set holds. Peter Hain, a Foreign Office minister, having been largely dismissive of European moves earlier in the week, sprang forth yesterday with the the belief that "we have got to work at the grinding business of diplomacy because nothing else is working."

The Prime Minister and his Foreign Secretary should have thought of that before, when they followed the US President in accepting Ariel Sharon's right to go into the Palestinian towns to root out suspected terrorists. Once Mr Bush and Mr Blair had done this, they implicitly left Mr Sharon to his own devices until he felt he had finished that job. American pressure and the arrival of the Secretary of State, Colin Powell, might just put a tighter deadline for withdrawal. But nothing Britain or Europe has to say will alter the course of the Israeli army.

Unfortunately, that course has nothing to do with peace in the conventional sense, nor war for that matter. As Mr Sharon has consistently made clear, it is about destroying the Palestinian Authority and neutering his old enemy, Yasser Arafat. He has never made any secret of this ambition, nor is anyone in the Arab world in the faintest bit surprised by it. Sharon has always opposed the Oslo agreement and has always believed that Israel's long-term security lies in in an expanded Israeli state and a reduced Palestinian capacity. By giving Sharon leave to follow this course, the West is effectively allowing him to obliterate the very thing that the outside world is looking to revive once the exercise is finished – peace talks between Israelis and Palestinians.

This is where the Europeans can, and must, enter in a way that isn't possible or of interest to America or to Britain acting on its own. The ultimate tragedy of the present descent into the abyss is not just the suffering of civilians on both sides, it is the bitterness and unforgiving hatred of the next generation.

Nothing quite so betrayed the ignorance of liberals in the West and Israel as the horror expressed at the Palestinian reluctance to seize the opportunity of Ehud Barak's election to sign a quick peace deal two years ago. It was as if three years of Netanyahu, of increased settlements, rising humiliations and receding peace plans could be dismissed as if they had never happened and had never had any effect on the trust and fears of the Palestinian population.

If those years of less violent suppression could result in Yasser Arafat's reluctance to make a deal for fear of his own people's outrage, think how much worse it will be after this invasion and all that is going on with it.

Yet where is Israel to go if it has no hope of anything but hatred from its neighbours? All of recent history – from the Balkans to southern Africa and Afghanistan – has tended to a single conclusion: the only hope of long-term peace and stability is within a regional context.

But where does Israel fit in to this? If many Arabs now openly express the view that Israel will not exist in a couple of generations, it is not because this is necessarily what they are seeking (although some no doubt do) but because they believe that events are now isolating Israel and that history will ultimately make it irrelevant.

Europe has an answer to this since it holds the key to regional development in the eastern Mediterranean. The Barcelona process, the trade negotiations conducted with Israel and Arabs, are central to both. Europe is Israel's largest trading partner as it is the whole of the Levant.

If it has failed to use this lever to its maximum, it is not because its diplomacy is too feeble but because its members are too pusillanimous and its bureaucracy now too shaken and too defensive to pursue the trade avenue vigorously enough.

Asked about trade sanctions yesterday. the President of the European Commission, Romano Prodi, said that trade agreements with Israel were an instrument of dialogue, not of blackmail. Strictly speaking he is right. It is pointless trying to "punish" Israel into withdrawing from the occupied territories. But Europe's own interests are clear and it has every right to insist on them. It is in the peaceable economic development of the whole region. If Israel wishes to be part of this, then it must seek to integrate itself into the Arab world. If it doesn't, then it has no place in the Barcelona process, nor a right to its association agreement with Europe.

a.hamilton@independent.co.uk