Palestinian rockets are again falling on Sderot, terrifying an already terrorized population. Members of different Palestinian factions are killing each other. The Israelis have not eased the burdens faced by the Palestinians, although the Supreme Court has ordered the IDF to take down a portion of the security barrier which, it ruled, separates Palestinians from their lands while allowing settlers to take it over. And Corporal Shalit remains a captive, with plans for a prisoner exchange still on hold. Authorities on both sides seem to view the cease-fire as an inconvenience rather than an opportunity and, it seems safe to say, neither will be that sad when it ends. That is why it's time for some leadership from beyond the immediate circle. The United States, the Europeans, and the Saudis, Egypt and Jordan, among others, all have a stake in kick-starting the stalled process. As for the pro-Israel community outside Israel, it also has a stake in breaking the deadly status quo. It is not true that one "supports" Israel by sitting back and allowing events to take their course. Here in the United States, we should be telling the president and the new 110th Congress that, although the Baker commission language isn't perfect, its call for engagement is. They need to know that silence is not support, although it is silence that has greeted the commission's call for engagement - silence along with the predictable carping about "linkage" although Baker-Hamilton does not advocate linkage. It simply and sensibly states the obvious: that progress toward an Israeli-Palestinian agreement will advance American interests throughout the entire Muslim world, including Iraq. Who can argue with that? SPEAKING OF progress, the Saudi peace initiative is back. Four years ago, when it was first issued, the Sharon government ignored it although it was a ground-breaking document. The plan, endorsed by all 22 Arab states, offered Israel full normalization of relations in exchange for creation of a Palestinian state in the West Bank, Gaza and east Jerusalem and withdrawal from the Golan Heights. Israelis who dismissed the plan said Israel would never return to the '67 lines, and that the plan's invoking of the Palestinian "right-of-return" made it a non-starter. The plan's proponents, however, made the case that its specifics represented maximum demands, not a final offer, and that Israel should enter into negotiations to discover how far the Arabs were willing to go. In fact, it has since become clear that the latter interpretation is, indeed, correct. The Saudi plan is not a "take it or leave it" offer but a framework to be negotiated over. Prime Minister Ehud Olmert indicated readiness to consider the initiative. Speaking at David Ben-Gurion's kibbutz, he said, "The voices emanating from those [Arab] states regarding the need for recognition and normalization of relations with the State of Israel - including, for example, some parts in the Saudi peace initiative - are positive." Last week, Defense Minister Amir Peretz weighed in. Speaking to the Israel Business Conference, Peretz said Israel "must deal with the Saudi initiative as a basis for negotiations." Fortunately, the Saudi offer is still on the table. In fact, Riyadh seems more determined than ever that the Arab world reach an accommodation with Israel. That determination has been significantly fortified by the Shi'ite explosion in both Iraq and Lebanon - not to mention the rise of the Shi'ite patron state, Iran, and its move ever closer to development of nuclear weapons. The Saudis are no less worried by these developments than Israel is. In point of fact, they have more reason to worry, given that Israel is militarily stronger than Saudi Arabia or any other Arab state. THIS THEN is the optimum moment for Israel to respond to the plan, especially in the wake of the Iraq Study Group report. The Baker-Hamilton report does not mention the Saudi initiative, discussing in vaguer terms the need for the US to make a serious effort to re-energize Israeli-Palestinian negotiations, which have been mostly dormant for over six years. It also recommends an international peace conference. It does not refer to any specific plan, but it increasingly appears that the Saudi initiative is the best option, because it has already been endorsed by all 22 Arab states and because the other outstanding plans (the road map, an international conference, and the Clinton parameters) can all easily fit under the Saudi plan's rubric. Another factor that recommends the Saudi initiative is its regional approach. Although a bilateral Israeli-Palestinian agreement would lead to mutual recognition between Israel and some Arab states, the connection is not direct. The Saudi plan spells it out: an Israeli-Palestinian agreement which, by definition, satisfies both sides will produce normalization between Israel and the entire Arab world. That's a good deal. The writer is director of policy analysis for the Israel Policy Forum.