Because of Lebanon, the Palestinian issue has taken a temporary back seat in the eyes of the public and media. Foreign Minister Tzipi Livni is right to say that now is the time to focus on it. But it seems that the Arab side has stolen a march on us. The Arab League plans to ask for a UN Security Council meeting in order to formulate a new resolution on the Israeli-Palestinian conflict. Such a resolution would likely seek to sideline Resolution 242, which recognized Israel's legitimate security concerns about the pre-'67 armistice lines. It would also dispatch the international Quartet's road map to the dustbin. Not by happenstance, Palestinian Authority President Mahmoud Abbas and Hamas Prime Minister Ismail Haniyeh, though still squabbling about details, have announced that conditions are ripe for a Palestinian "national unity government." As a backup to the Arab League plans, Abbas will go to New York in order to present his case to the UN General Assembly. The timing is no coincidence - nor is the main thrust of Arab strategy a mystery. It wants to exploit the supposed psychological benefits the Arab cause gained from the Lebanon war. At the same time, conversely, the image of Hizbullah's "divine victory" has set alarm bells ringing in more than one Arab capital. The fear is that Iran, which many Arab regimes hold responsible for creating the Lebanon crisis in the first place, might want to further exploit the situation as part of its geopolitical designs for Shi'ite hegemony in the entire region. THIS BRINGS me back to the Palestinians. For most of the more "pragmatic" Arab regimes the Palestinian problem is a headache they would like to get rid of as quickly as possible - especially since the Hamas election victory. They have come to realize that Iran and the growing menace of Shi'ite radicalism are a much greater threat to them than the Zionist enemy. Both the Arab League initiative at the UN and the budding understanding between Abbas's Fatah movement and Hamas will be based on the so-called Arab peace plan, hatched in 2002 under the aegis of Saudi Arabia's then crown prince and now King Abdullah at an Arab League Conference in Beirut. The intention is for the UN - probably with the support of most of the Europeans, Russians and the African-Asian bloc - to call for an international conference, a sort of Madrid II. This would be based, in addition to Resolution 242, on the Saudi Plan. The inconvenient road map with its phased approach to solving the Palestinian-Israeli conflict - the very first of which calls for the breaking up of the terrorist infrastructure in the territories - would be jettisoned. The Saudi Plan calls for the "right of return" for Palestinian refugees of the 1948 war, though this demand is couched in moderate-sounding terms. The Saudi Plan also calls on Israel to completely withdraw to the Green Line, including in Jerusalem. If implemented, and without stretching the imagination too far, one could envision the West Bank ruled by Hamas becoming a Sunni replica of Shi'ite southern Lebanon. All of central Israel would be exposed to the kind of threat - or worse - now seen in the North and in the Negev. ONE MAY assume that the Arabs understand that their warmed-over ideas constitute a nonstarter from Israel's point of view. But the Arab League apparently hopes that as a result of the inevitable failure of any proposed international conference, the onus would be put on Israel. That would lead to diplomatic and political pressure on Jerusalem - including, perhaps, from a domestically and internationally weakened US. The worst-case scenario would be to fall into the trap of trying to solve all the intractable issues involved via a permanent status agreement. Going down that road would lead to the kind of political chaos the region experienced in the wake of the Clinton-Barak Camp David meetings in 2000. Rather than solving anything, such an outcome would serve the interests of Iran and Islamists in general. A better approach necessitates a diplomatic initiative of our own, especially since unilateral disengagement is now off the table. One not entirely new idea that - in view of the changed realities in the Arab and Muslim world - could assume a new relevance is reaching (with the help of some Arab states) a long-term interim agreement with the Palestinians. Any deal would require a total end to terrorism while advancing some of the legitimate (or just legitimate - as Menachem Begin used to distinguish) aims of the Palestinians. Foreign Minister Livni is right that Israel needs to turn to the Palestinian issue - but we need to be wise and careful about our approach. The writer is a former Knesset member and ambassador.