It's beginning to seem possible. And not only on the northern border, where UN Security Resolution 1701, if actually implemented in full, will significantly reduce the Hizbullah threat, and with it Iran's ability to manipulate the Israeli-Palestinian conflict to its advantage. It would also strengthen the Lebanese state vis-a-vis Hizbullah, and might also lead President Assad of Syria to recalibrate the pros and cons of negotiating with Israel. No person of sound mind would bet on all of that happening, but it might. After all, it was the disastrous Yom Kippur War that led, almost directly, to a peace treaty with Egypt which has served as a centerpiece of Israel's security strategy for a quarter century. If the Yom Kippur attack could lead to peace between the man who launched it and prime minister Menachem Begin, contemplating positive outcomes from the Lebanon conflict may not be all that far-fetched. Of course, achieving a peaceful northern front would not be quite the accomplishment the peace treaty with Egypt was. The successful implementation of Resolution 1701, in all its parts, would not revolutionize Israel's situation the way the Camp David Accord did. It would, however, significantly improve it. But it is the Palestinian issue that remains at the center of the Arab-Israeli conflict, and no agreement with Lebanon, Syria or even Hizbullah would change that. No other Arab party can "deliver" the Palestinians. Only the Palestinians themselves can move to end the conflict. If and when they do, most of the Arab players will go along. THE PALESTINIANS may again be on the verge of abandoning the war option and pursuing negotiations. The first step would be the establishment of a unity government that would halt acts of violence and authorize President Mahmoud Abbas to begin negotiations with Israel. Reports indicate that the unity government could be set up at any time - the Palestinian economy has collapsed and the EU has indicated that establishment of a unity government committed to ending the violence could reopen the aid spigots. Efforts to resume negotiations with Israel would follow the release of Cpl. Gilad Shalit and the Palestinian prisoners who will be freed in exchange for him. It is also expected that the unity government would call for an international peace conference to kick start Israeli-Palestinian negotiations. This is where it gets interesting. At the same time that the Palestinians are thinking about negotiations with Israel under international auspices, the Arab League is about to dust off the 2002 Saudi initiative, which proposed full normalization of relations with Israel in exchange for the return of all the land occupied by Israel in 1967. The 2002 plan was both a major breakthrough and a nonstarter. On the positive side, it stated that the Arab world would, in exchange for the '67 territories, establish not only peace with Israel but full normalization: trade, tourism, etc. However the plan never got off the ground because on the very day it was announced, a terrorist attack killed 30 people at a hotel in Netanya. Beyond that, the plan called for Israeli withdrawal as a precondition rather than as one of the goals of negotiations, and endorsed full implementation of the Palestinian right of return. Obviously that was unacceptable to Israel. The initiative, promising as it might have been, disappeared. But now there is a new improved version in the works. The basic difference between Arab League Initiative I and Arab League Initiative II is that the idea currently being considered in Arab capitals would not require territorial withdrawal as a precondition. Instead, territorial withdrawal, along with all the other issues dividing Israelis and Arabs, would be addressed in bilateral negotiations (Israeli-Palestinian, Israeli-Syrian, Israeli-Lebanese) under the auspices of an international conference, much like the Madrid Conference of 1991 which kicked off Israeli-Palestinian negotiations. The entire process would be kicked off by a new United Nations Security Council Resolution. This new approach looks promising. This is not to say that the US should rush to embrace it. Washington is committed to the road map, which sadly remains buried in the glove compartment. But the road map has its advantages. In its first phase (never implemented, of course), Israel would have to dismantle illegal settlements, freeze all other settlement activity and terminate "actions undermining trust, including deportations, attacks on civilians; confiscation and/or demolition of Palestinian homes and property, as a punitive measure or to facilitate Israeli construction; [and] destruction of Palestinian institutions and infrastructure." THE PALESTINIANS would have to "declare an unequivocal end to violence and terrorism, and undertake visible efforts on the ground to arrest, disrupt and restrain individuals and groups conducting and planning violent attacks on Israelis anywhere." Until now, the main obstacle blocking movement on the road map has been Palestinian violence. If a new unity government adopts a comprehensive cease-fire, Israel will likely move to implement its road-map obligations. De facto, a key condition of the first phase of the road map would be fulfilled. At that point, the two sides could be ready to start the serious give-and-take of negotiations in the context of an international conference. That is where the Arab League Initiative could come in, assuming we don't simply ignore it as we did last time. Neither the United States nor Israel should repeat the mistakes of 2002. That means exploring whether or not the Arab League is serious about full normalization of relations with Israel in exchange for withdrawal. And it means following events in Gaza closely to see whether a unity government offers the long-sought possibility of a partner Israel can do business with. It also means finding a way to discern President Assad's intentions. If he is ready for serious negotiations without preconditions, both the US and Israel should be ready to engage with him - that is, if our goal is to break the Iran-Syria axis rather than solidify it. The horrors of the Lebanon conflict powerfully demonstrate the dangers in rejecting any possibility of a breakthrough that might arise. It is easy to say that this person is unacceptable and to reject this or that offer out of hand. It is harder to seek out nuance, to discern differences within factions, and to seize possibilities - no matter how well camouflaged - that offer hope for a breakthrough. But as this summer taught us, there is really no other choice. Once again the status quo has proven deadly. Reverting to it shouldn't even be an option.