Extract from an article in Issue 17, December 10, 2007 of The Jerusalem Report. For full story please subscribe to The Jerusalem Report click here to subscribe. Some members of Ehud Olmert's coalition were smiling and others were scowling after the vote. The Knesset had just approved the latest in a series of moves by the hawks to scuttle any chance of a dramatic Israeli-Palestinian breakthrough at the upcoming Annapolis Middle East conference. The biggest grins were on the faces of cabinet ministers Avigdor Lieberman and Eli Yishai, respectively leaders of the coalition parties Yisrael Beiteinu and Shas. They had helped push through the preliminary reading of a bill making territorial concessions in Jerusalem subject to a special majority of 80 of the 120-member house, initiated by the Likud opposition and designed to tie the prime minister's hands in negotiations with the Palestinians. Olmert had indicated that he was ready to give up outlying Arab parts of Jerusalem and now, if the bill becomes law, that would become almost impossible. It was mid-November, just weeks before the scheduled peace parley, and the smell of failure was in the air. By threatening to bolt the coalition and topple the government, if solutions for core issue like Jerusalem, borders and refugees were even discussed at Annapolis, Lieberman and Yishai had forced a dramatic climb-down in Olmert's positions. Besides fearing the fall of his government, Olmert was concerned that President Mahmud Abbas's weak Palestinian Authority - also facing internal constraints - would not be able to carry out any agreements it might reach with Israel. He feared the Palestinians would then simply pocket Israeli concessions, which would become the basis for future negotiations and further concessions. Whereas in September the prime minister had spoken of a "historic opportunity" and in October he boldly promised to tackle all the most difficult issues, by November, Annapolis had been reduced to a meeting that would last no more than one day and serve merely as a launching pad for further negotiations. Hopes for an early Israeli-Palestinian deal gave way to searching questions about the consequences of failure of the Annapolis process for Israeli-Palestinian relations and for stability in the region as a whole. In pre-conference talks between Foreign Minister Tzipi Livni and former Palestinian prime minister Ahmed Qurei, the two sides had managed to agree only on the negotiating structure. The process launched by Annapolis would have two parallel tracks: one focusing on a final peace deal, the other on implementation of Palestinian commitments to stop terror and disband terrorist militias and Israeli promises to dismantle unauthorized settler outposts in the West Bank. What this boiled down to was Israeli acceptance of a longstanding Palestinian and European demand that the parties discuss the first and final phases of the international road map in parallel, but on the understanding that no part of a final peace deal - for example establishment of a Palestinian state (phase three) - would be implemented until all violence stopped (phase one). But, as of mid-November, Livni and Qurei had failed to make any headway on the core issues, including Palestinian recognition of Israel as a Jewish state. Nor could they agree on a timetable or a monitoring mechanism for post-Annapolis negotiations. A few weeks earlier, things had looked much brighter. Abbas had spoken of a Palestinian state of 6,205 square kilometers, indicating a willingness to solve territorial issues through one-to-one land swaps; Olmert had indicated flexibility on Jerusalem and a willingness to accept 2,000 refugees a year for 10 years in family reunions. But by mid-November, increasingly skeptical critics were asking how the parties would be able to proceed after Annapolis, given their domestic constraints and the fact that, back to square one, they again seemed so far apart on the core issues. Politicians on both the right and left who spoke to The Report warned of major internal Palestinian and regional consequences of failure, with serious implications for Israel. Right-wingers urged Olmert to reduce the risks by slowing down the process and lowering expectations. Left-wingers advised him to call the Annapolis conference off until the two sides agreed on a breakthrough document. Independent analysts spelled out the potential risks: collapse of the moderate Abbas government, rise of Hamas, discrediting the Israel-Palestine two-state solution, and, in the region, a strengthening of the radical, anti-American Iranian-led axis. "If the disengagement process in Gaza was a 'tailwind for terror,' failure of this meeting in Annapolis will be a typhoon in the fundamentalist sails," says Yisrael Hasson, of Lieberman's far right Yisrael Beiteinu. Hasson, a former deputy head of the Shin Bet, Israel Security Agency, argues that Annapolis, rather than too little too late, "is too much too soon," and he blames the Americans for pushing the parties into a process for which they were not ready. "There is no way a weak Abbas will be able to carry out his most elementary commitments," he says. "Therefore the whole idea of a process leading to a final peace deal with him was totally misguided." Hasson also takes issue with the American plan to use Annapolis and a successful Israeli-Palestinian process to help build a moderate coalition against Iran. Only after the Americans demonstrate toughness against Iran will they have the regional credibility to build a solid coalition, he argues. First trying to build a coalition and then getting tough is going about things backwards. As things stand, he maintains, the Americans are being outmaneuvered by Iran at every turn. "The Iranians have been able to smash American policy everywhere, so far with conventional means only. In Palestine with Hamas, in Lebanon with the Hizballah and in Iraq with the Syrians and Shi'ite militias. And until the Americans show Iran that this policy carries a heavy price, I would advise them not to count on any coalitions they may build," he insists. Hasson, though, thinks Olmert is playing a very shrewd political game. He maintains that the prime minister knows full well that the Annapolis process is doomed to failure, and is simply using it to reinstate his earlier policy of unilateral withdrawal from the West Bank, known as "convergence," and on which his Kadima party was elected in 2006 and bitterly opposed by the right. "I think Annapolis is intended to launder the convergence process and to energize Kadima's next election campaign," he charges. "They will say, 'Look, we tried negotiation and it failed. What is left is the convergence plan,' and that will be their platform for the next elections." Others on the right are less suspicious of the prime minister's motives. Former foreign minister Silvan Shalom of the Likud argues that it is too late for Israel to pull out of the doomed Annapolis process - and says Olmert is doing the right thing by lowering expectations to avoid disappointment and frustration that could lead to another Israeli-Palestinian flare-up. Shalom even sees some potential positives in the Annapolis gathering: He believes that Israel can make progress towards normalization of ties with the moderate Arab and Muslim countries slated to send delegates to the conference. "The fact that they are all in the same place means hours of rubbing shoulders, which should lead to side meetings and contacts that should be followed up," says Shalom, whose pet project as foreign minister was discreetly developing ties in the Arab and Muslim worlds, especially in North Africa and the Gulf, and who had a well publicized meeting with Pakistan's foreign minister in Istanbul in September 2005. But as for the Israeli-Palestinian track, Shalom argues that progress is virtually impossible. "It's impossible because the positions on the core issues are too far apart; because the Palestinians aren't prepared to make the slightest compromise; because Abbas does not represent the entire Palestinian people; and because the minute Olmert makes a move, his government will fall," he declares. Politicians on the left argue that Olmert has far more freedom of action than Shalom suggests and insist that the prime minister is missing a historic opportunity for peacemaking, with potentially catastrophic consequences. Meretz leader Yossi Beilin, for example, warns that holding a conference with a diluted agenda will be a big mistake. "Annapolis in its present form will be a farce. If they don't discuss substantial issues, and if there is no timetable for negotiations, it will do more harm than good," he asserts angrily. Beilin, one of the architects of the Oslo process and a leader of the Geneva initiative, which produced a model Israeli-Palestinian peace deal, argues that there is a real chance now for accommodation, which Olmert is wasting by needlessly kowtowing to the right. "I don't understand Olmert," he fumes. "In the past few months, even weeks, he showed a great deal of enthusiasm for the conference. He saw in it a real opportunity to move forward towards a final settlement. And then, when he ran into Lieberman and Yishai, he gave up. I just don't understand this when there is a solid majority of 70 Knesset members who would support any agreement he reaches." Beilin's count apparently depends on all 29 Kadima Knesset members supporting a peace deal, but Kadima hawks, some of whom supported the Jerusalem bill, might vote against, making it a very close-run thing. In any event, with so little on the agenda, Beilin argues that Annapolis won't even get the moderate Arab endorsement its American sponsors were hoping for. "The Arab states won't send leaders, only lower level diplomats," he predicts. For full story please subscribe to The Jerusalem Report click here to subscribe.