PERSPECTIVES ON THE MIDDLE EAST : Bush May Have a Winner Here . . . : Bringing Arabs, Israelis together may shake loose other impediments to his primary goal: long-term security of the oil supply.

In recent months, the United States has been reducing its strategic engagement worldwide--everywhere, that is, but the Middle East. When President Bush opens the Arab-Israeli peace conference in Madrid, he will be making a major gamble that will either confirm U.S. primacy in the region or promote new risks to U.S. interests.

With its twin victories in the Cold War and the Persian Gulf, the United States rang down the curtain on the postwar era, which was dominated by military power and the political standoff between history’s two mightiest nations. Geo-economics is replacing geo-strategy as the dominant shaper of global politics. But the Middle East is still stuck in the past. With the end of East-West confrontation in Central Europe, the Middle East now holds the title of Most Heavily Armed Region on Earth. And as the great powers muse about limiting arms sales, the purchase of conventional weapons by local states is regaining momentum.

These facts matter to the United States for the same reason that Bush sent half a million troops to the region last year: to guarantee the flow of oil.

The Persian Gulf has become the locus of the most palpable challenge to a critical U.S. strategic interest: the energy supply. Today, that challenge is not posed by Iraqi aggression, though Saddam Hussein remains a brooding menace, but by the aftermath of Desert Storm: the continuing possibility of a backlash, of new instabilities in the region in the wake of Western military victory over an Arab nation.

More than anything else, concern for reducing the long-term risks to oil explains the commitment of President Bush--himself an oil man--to prosecute Arab-Israeli peacemaking. Indeed, the traditional U.S. motives for trying to unravel the world’s most complex diplomatic problem are now absent: There is currently no threat of Arab attack on Israel or of Soviet expansion into the region.

Like it or not, the continuing dispute over Jerusalem and the fate of the Palestinians is the touchstone of Arab politics, a critical factor in regional stability and the single most important long-range determinant of U.S. standing in the region. At the moment, that standing is at its all-time peak, as is America’s pre-eminence as the sole great power in the Middle East, to a degree unmatched by any other country for at least the past two centuries.

By going to Madrid, George Bush is thus exploiting America’s unusual position and committing an act of rare statesmanship: building for the long-term rather than responding to the moment. His focus on Arab-Israeli diplomacy has been made necessary in part because of U.S. frustration over alternative means of promoting regional stability. The United States has concluded defense agreements with Kuwait and Bahrain, but these do not guarantee tranquility in the Persian Gulf. Indeed, Saudi Arabia is again becoming wary of a permanent U.S. military presence and is asking that U.S. weapons and ammunition stockpiled for Desert Storm either be removed or sold to Riyadh. And as the hostage crisis in Lebanon falls short of resolution, Bush has been stymied in his efforts to repair U.S. relations with Iran, a nation key to the regional balance.

In addition, the President has become locked in a dilemma of his own making. He has vowed not to lift sanctions against Iraq so long as Saddam Hussein remains in power, but the Iraqi dictator refuses to go. Nor will he accept the United Nations’ permission to sell $1.5 billion worth of oil and thereby relieve the plight of his people, whose situation is increasing international pressures to end sanctions altogether. Uncertain of winning this test of wills but needing to show U.S. competence as the arbiter of regional security, Bush has turned to the Arab-Israeli issue.

The prospects that Bush’s gamble will succeed--that the Arab-Israeli conflict can be moved toward resolution--are better than at any other time since President Jimmy Carter left office. The PLO has not fully recovered from its disgrace in backing Saddam Hussein. The Soviet Union is a U.S. ally. And everyone who matters has accepted the U.S. invitation to Madrid--all are in the tent, and no one important is outside.

Secretary of State James A. Baker III has also crafted the best possible strategy. By getting Israelis in the same room with Palestinians and Syrians, Baker hopes that psychology will begin to change, as happened in both Egypt and Israel after Anwar Sadat went to Jerusalem in December, 1977. In the months after Madrid, Israel and its negotiating partners will wrangle about specific issues, but two critical decisions could emerge. Syria may decide that it has more to gain from ending hostilities than from playing the spoiler; and Israel may decide that it prefers peace to keeping all of the West Bank. All other questions are secondary.

The necessary breakthrough in psychology can be achieved only through time, patience and the deep and continual involvement of the United States. Success is far from assured. But by going to Madrid, Bush has staked his regional reputation on Arab-Israeli diplomacy and confirmed that the United States will remain a Middle East power for the indefinite future. Long-term American interests throughout region will be critically affected by the results.