Regional Outlook : Who Needs Peace in the Mideast? : Even liberals are wondering whether this week’s talks are a waste of time. With Israel rudderless and Islam in upheaval, real peace seems far off.

Curiously, it was not only the far right wing in Israel that last week called for suspension of Mideast peace talks. Shimon Peres, the leader of the relatively dovish Labor party and a longtime advocate of such negotiations did too.

With early elections on tap after two rightist parties pulled out from Prime Minister Yitzhak Shamir’s ruling coalition, Peres argued that “what passes for negotiations should be stopped since the whole thing is just a fashion show.”

His comments point up the fragility of the Middle East negotiations brokered by the Bush Administration and the ever-present possibility of collapse. Already three months old, the talks have produced little except a series of agreements to meet again.

The slow pace stands in sharp contrast to rapid and worrisome developments in the volatile region itself.

Since the talks began in October, Algeria has seen an astounding election triumph of Muslim nationalists followed by what amounts to a military coup. Iran has campaigned against the talks and encouraged its client guerrillas in Lebanon to step up their hit-and-run war against Israel. The United States is pondering calls for a low-intensity war against Iraq, to be funded by Saudi Arabia. Islamic fundamentalists in Jordan are clamoring for power. Syria is in the market for a nuclear reactor. And Israel’s always fractious government has cracked at the seams.

The events, though largely unrelated, reveal the flip side to the altered status quo in the Middle East. If it can be said that the end of the Cold War and the defeat of Iraq opened the way to peace talks, it is also true that they paved the way for unexpected turmoil.

And, looking at the recent track record, some analysts are now wondering whether events outside the negotiating room may not be far more important to the region’s immediate fate than anything happening within.

The United States clearly remains the leading force in the region. But with its own economy in decline and an election campaign under way, these analysts ask, does America have the reach to control events in a distant part of the world? Iraq’s lunge for Arab world leadership has been derailed, but there are other candidates to fill the gap: Syria, and in the larger Muslim context, non-Arab Iran.

At best, in this view, the peace talks--including a multilateral round scheduled to open in Moscow today--are a way of keeping some kind of dialogue going and hopefully reducing the number of potential regional renegades.

“If nothing else,” said an Israeli Foreign Ministry official, “some dangers could be lessened even if fundamental hostilities still simmer.”

Those hostilities caused Syria and Lebanon to bow out of the Moscow meeting early, and the appearance of others on the guest list remained uncertain almost to the eve of the event. The Palestinians waffled to the last, and nobody seemed sure about the Saudis. Israel was on the way, as were officials from the United States, Canada, Japan, China, and several key European governments.

And what if the talks collapse, either in Moscow or during what is sure to be a raucous Israeli election campaign?

Expect a tremendous explosion--of bombast and headlines. Arab leaders such as Egypt’s Hosni Mubarak and Jordan’s King Hussein, American clients who quickly embraced the Washington-sponsored talks, will publicly mourn lost opportunities and blame Israeli intransigence. Israeli politicians will point a finger at Syrian obstructionism. Political damage control will be undertaken across the Middle East, and those who went to Madrid, Washington and Moscow for the talks will be under fire.

But do not expect an explosion of hostilities. Despite the groaning and escalating weight of weapons in the Middle East, changing political chemistry has diminished the risk of regional war. The Gulf War was not regional; Iraq’s Saddam Hussein wishes it had been, but no other Arab nation took up arms against the U.S.-led coalition, nor did the Palestine Liberation Organization. The only scars in Israel were made by Iraqi Scuds.

The Middle East maxim in the conflict with Israel is that there can be no war without Egypt and no peace without Syria. It’s been true since Egypt’s Anwar Sadat went to Jerusalem in 1977 and still holds. Nothing in the collapse of this latest of many Middle East peace initiatives would alter that chemistry.

And with the defeat of militarist Iraq in the Gulf and the preeminence of U.S. power in the region, the possibility of a surprise explosion is minimal.

But the collapse of the peace process would have political echoes.

Israel

In Israel and the occupied territories, the collapse would mean continuation of the low-level conflict known as the intifada, or Arab uprising. Israel has virtually got the revolt at what is considered manageable levels; that is, becalmed enough neither to make headlines nor impede the persistent colonization of the territory by Israeli settlers.

Shamir is banking on getting American aid for Soviet immigrants and maintaining the settlement campaign. A breakdown in the talks would probably enhance his chances, as long as Israel doesn’t get blamed.

The Palestinians would be big losers. When would another chance to get Israeli concessions come by again? Within a decade, it’s likely that settlements will be arranged in such a way that there would exist no geographic entity that the Palestinians could claim as their own.

If history is a guide, there could be recriminations among Palestinians for failure of the talks; hard-liners would claim to have been right all along and accuse moderates of wasting time.

But what to do? The terrorist network has lost some of its staunchest allies in the former Soviet Bloc. Iran might make a pitch to revive it, but even there, the quest for respectability in Tehran might moderate its influence.

Jordan

Here, the political rebound of failed talks would be tricky. Even before the Madrid round, Jordan’s King Hussein moved to appease the fundamentalist power bloc in his nascent democracy by dumping Prime Minister Taher Masri, a Palestinian strongly supportive of the talks. Their collapse would be a personal defeat for the monarch, which the fundamentalist Muslim Brotherhood would delight in exploiting.

But the king’s great problem now is not war or peace but the economy. Long fragile, and wed to Iraq for trade, it was wrecked by the Gulf War. On top of that came the return of hundreds of thousands of Palestinians and Jordanians from Kuwait and the shut-off of aid from Saudi Arabia and the other oil states.

Israel could drive Jordan to war if it began a mass expulsion of Palestinians from the West Bank, but that option remains a radical choice in Israel.

Syria

President Hafez Assad finds himself in command of the biggest Arab army with the defeat of Iraq’s, loaded with Scuds and shopping for a 300-mile-range Chinese missile. But Assad gets points for sagacity while Saddam Hussein has committed one military blunder after another.

Damascus-based diplomats agree that the president has no intention of getting into a war with the Israelis but will press hard politically to seek big power-support for the return of the Golan Heights. If his boycott of the Moscow talks cripples the peace process, he has lost little. He will rise in the estimation of Arab nationalists and not seriously damage his campaign for acceptance by the West to replace his fading Kremlin sponsorship. Washington has differences with Damascus but wants Syria inside its “new world order.”

Typically, Assad can expect to stubbornly wait for events to turn his way.

Lebanon

This country is now little more than a Syrian vassal in foreign affairs. It will follow the Damascus lead, although it is Lebanon where Israeli jets and commandos strike with impunity. When Assad decided not to send a delegation to Moscow, President Elias Hrawi announced his own boycott within hours.

Last year, the reconstituted Lebanese moved against Shiite Muslim and Palestinian militias in the south. But they did not disarm the pro-Iranian Hezbollah as they had the other groups, and the strongest anti-Israeli talk these days is coming out of Tehran. The advent of peace talks did not lessen Hezbollah activity, nor would their collapse. Conversely, Israel has had no compunction against hitting Hezbollah and Palestinian targets in Lebanon while the talks were under way.

Regional Issues

Ultimately, of course, the absence of hostilities is not the same as the existence of peace. If the countries of the region are to prosper in the longer term, they will eventually have to deal with the agenda long ago set down for the Moscow talks.

The arms race--The Gulf War showed how weak even the most powerful Arab army can be when faced with a technically superior Western force. The danger, therefore, is that military-oriented leaders will shop around for a great equalizer; Iraq’s effort to develop a nuclear weapon highlights the dangerous potential.

Israel has traditionally believed that it is mostly up to the Western powers to stop the Mideast arms race. It is the West, after all, that sells much of the weaponry and technical know-how and that has the clout to get other suppliers--notably China--to stop transferring weapons.

It also wants bilateral inspections--Israel would look at their neighbors’ armories and the neighbors would get a look at Israel’s. “We cannot put our security in international agencies,” said a Foreign Ministry official, noting that international inspection of Iraq had failed to control the growth of the Iraqi nuclear arms program.

This thrust by Israel, however, might force it to acknowledge its most open secret: the existence of 200 or more nuclear warheads in its own arsenal.

In Moscow, Israel modestly hopes to open communications on the subject, banking that such contacts will at least make war-by-miscalculation less of a risk. Of course, since neither Syria nor Iran will be present, prospects are dim.

The water struggle--The most precious commodity in the Middle East? It’s water, not oil. Ancient civilizations built huge systems of dams, aqueducts and cisterns to catch, move and save the sparse rainfall. Millennia later, the situation remains unchanged, but there are far more people dependent on supplies.

“The situation is bad,” says Dr. Elias Salameh, director of the Water Research and Study Center at the University of Jordan in Amman. “Generally precipitation is declining in the area,” he said. “But that’s not the problem. The problem is population growth.

“In olden times when there were too many people for the water, two things happened: they migrated or they died. Now we need new solutions.”

Upstream on the Middle East water map is Turkey where the Euphrates and Tigris rise, sending clear mountain water into what used to be called the Fertile Crescent. The two ancient rivers feed the downstream water systems of Syria and Iraq.

To the west, the key rivers are the Jordan and the Yarmuk which flow from Lebanon and Syria and join each other south of Israel’s Sea of Galilee. All have been soaked in the water politics of the region for decades.

Syria and Iraq cried foul when construction of a vast hydroelectric and irrigation project in Turkey cut the flow of the Euphrates to a trickle, and Damascus complains that the Turkish project causes problems for its own big Euphrates dam.

Jordan says Syria is checking the flow of water feeding the Yarmuk, and both Syria and Jordan accuse Israel of diverting water from the same river to the Sea of Galilee.

The rights of downstream users is the kind of legal concept that could be taken up in multilateral talks. But it’s a commodity for political hardball in the region. Last summer, before his election as Turkey’s prime minister, Suleyman Demirel said of water rights:

“If a natural resource is in our country, we have every right to use it the way we see fit. Water is an upstream resource in Turkey and downstream users cannot tell us how to use our resource.”

Meanwhile, the Turks, who will not be at the Moscow talks, have been refloating an old proposal for a so-called Peace Pipeline, an immense project that would cost an estimated $17 billion and deliver water now emptying into the Mediterranean as far south as Saudi Arabia. Precious as water is, however, studies have failed to come up with reliable sources for funding.

The refugee dilemma--Lebanese Christians in suits from Paris aking a turn at roulette on the ferry to safety in Cyprus; mud-covered Iraqi Kurds pausing briefly to bury a dead child in their flight to Iran; Palestinians who fled Israel in 1948 to find work in Kuwait, now pushed out of the Gulf into the squalid camps of Jordan. Refugees all.

Most have fled from war and many have washed up in makeshift camps of dirt-floor, cement-block homes run by the United Nations or other agencies.

For host nations, they pose problems--mouths to feed, competition for local jobs, security demands for the politically radicalized in camps primed for explosion.

The children grow up in the numbing world of camp life--no privacy, crowded homes, abysmal sanitary conditions. The elderly old men and women live in memories of a villages their grandchildren may never see, though they it stand less than a day’s walk away.

The Moscow talks are to deal with this sad traffic--particularly with the Palestinian refugees, who number about 1.5 million in Jordan, Lebanon, and Syria alone.

The Palestinians want the issue to form part of their bilateral settlement with Israel; they demand the right of Palestinians to return at least to the West Bank and Gaza Strip and insist that such a right must be recognized, even if it is bought off with compensation.

Israel, which recognizes no such right, insists that the refugees be treated as citizens of the countries where they live.

Economic have-nots--Economic development has a variety of meanings in the Middle East, but a common thread is the desire of the majority of poor countries to get aid, trade and investment from the few rich ones. The United States, Japan and the Western Europeans have money, so they’re part of the formula. So do Saudi Arabia and the Gulf states--including, once war damage is repaired, Iran and Iraq.

The have-nots are countries such as Syria, Jordan, Yemen and Egypt. Some have no oil. Most have too many people on the government payroll. Syria has oil, but also a decrepit, state-run industrial sector. The desert countries, including several in North Africa, belong to what diplomats call the Three P Club--a little phosphate, a bit of potash and lots of poverty.

Gulf War politics has disrupted the old pattern of aid and trade, and diplomats say it will take years to repair the damage of broken economic ties. But the peace negotiators are looking for an immediate fix. Israel wants the Arabs to lift the long-standing boycott against its goods and erase the blacklist on companies that do business in Israel. Not without peace, say the Arabs.

In the absence of inter-regional trade--a victim of political barriers and undeveloped consumer industries--many countries are moving haltingly into tourism, that great fount of dollars in the developing world. But instability is the curse of tourism--it evaporated completely during the Gulf War--and until peace comes to the Middle East, Arabs and Israelis will continue to trek to Washington, Brussels and Tokyo with their hands out.

Mideast’s Four Trouble Spots

ARMS CONTROL: Israelis believe control of conventional weapons is up to Western powers--the major arms peddlers in Mideast. But in any deal, Israel wants bilateral inspections, having little trust in international watchdogs. Arabs seek elimination of Israeli nuclear threat. Above, soldiers undergo chemical decontamination exercise in Saudi Arabia, reflecting another regional weapons concern.

WATER: Syria, Iraq and Jordan accuse Turkey and Israel of monopolizing water supplies. But even with fair distribution, there is not enough water to sustain the region’s growing populations and agriculture. Only the wealthy Persian Gulf states can afford desalination. Left, oil from the Gulf War fouls coastal waters.

REFUGEES: Peace does not mean return for many Palestinian refugees who left their homes in the 1948 Israeli war of independence. Most stood in what is now Israel, and peace formulas deal only with occupied territories. But the ’48 refugees hope for compensation. Israelis say they should turn to their Arab host governments. Left, Palestinian refugee children play outside tent in Baghdad.

ECONOMIC DEVELOPMENT: For most Arab nations, economic advance depends on outside investment and aid, from the West or the region’s own oil sheikdoms. Gulf War politics has disrupted the flow. Israel seeks the elimination of an Arab boycott, which penalizes companies that do business with Israelis. Left, a produce market in Baalbek aids the ailing Lebanese economy.

Who’s Got the Water

Middle East is one of world’s driest areas. But within region, water resources vary widely.

Internal renewable water resources, per capita, in cubic meters Kuwait: 10 Jordan: 173 Lebanon: 271 Turkey: 317 Saudi Arabia: 321 United Arab Emirates: 429 Israel: 447 Syria: 449 Oman: 561 Egypt: 1,202 Iran: 1,362 Iraq: 4,575 United States (By comparison): 2,162

Total internal renewable water resources, in cubic kilometers

Kuwait: 0.01 Jordan: 0.45 Lebanon: 0.75 Turkey: 15.6 Saudi Arabia: 2.33 United Arab Emirates: 0.42 Israel: 1.9 Syria: 3.34 Oman: 0.43 Egypt: 56.4 Iran: 45.4 Iraq: 42.8 United States (By comparison): 467

SOURCE: World Development Report 1991

NOTES: Actual resources change from year to year. Most per capita figures are based on 1987 population estimates.