NEWS ANALYSIS : Arab-Israeli Impasse Casts Doubt on U.S. Mediation : Mideast: Washington faces question of how much political energy to invest. Envoy’s mission was unproductive.

With the Arab-Israeli negotiations at an impasse, the Clinton Administration is facing the tough question of how much political energy to invest in the unpromising search for peace in the Middle East.

After a week of talks with Israel, Syria, Jordan, Egypt and the Palestinians, U.S. special envoy Dennis Ross returned to Washington on Wednesday with differences on crucial issues still very wide--so wide that there were suggestions the U.S. mediation effort may have run its course.

All Ross said as he finished here was that the “talks were very good, very useful in the process of trying to find ways to narrow the gaps. Everybody is very serious about trying to find those ways, and at this point we are just going to continue with that effort.”

And all Ross took back to Washington, according to Israeli and Palestinian negotiators, was a thick sheath of objections, rewordings, criticisms and a few real alternatives to the latest U.S. draft of a declaration of principles. The document is intended to lay the basis for Palestinian self-government.

“Not a success. . . . The progress was lateral at best,” a well-placed Israeli official said of the Ross trip. “After 21 months, this peace process seems just to have run out of steam.”

According to Israeli and Palestinian negotiators, Ross is likely to recommend to Secretary of State Warren Christopher that he tour the region himself in an attempt to re-energize the talks and focus them on immediate, key issues.

The goal of a Christopher visit would be to bring Israel and the Palestinians to broad agreement on a declaration of principles. This would move the negotiations into actual implementation of the transfer of power to the proposed “Palestinian Interim Self-Governing Authority.”

If Christopher succeeded, negotiations would resume in Washington for two weeks on measures that would quickly put the Palestinians in charge of a wide range of governmental activities in the occupied West Bank and Gaza Strip. Meanwhile, a full agreement on autonomy would be worked out. This would probably bring movement in other talks with Syria and Lebanon.

Among the current American ideas, according to Israelis, is raising the level of negotiations to foreign minister and promoting a meeting between Israeli Prime Minister Yitzhak Rabin and Syrian President Hafez Assad.

Israelis and Palestinians, however, have begun to consider both changing the way they negotiate and what they are negotiating--which could divert them from the Washington talks and their format.

Israeli representatives, for example, have secretly met officials of the Palestine Liberation Organization to discuss difficult issues in the talks and explore others, such as use of the Gaza Strip as a laboratory for a Palestinian state. The PLO was excluded from the Washington talks at Israeli insistence.

The PLO, meanwhile, is establishing a framework of committees jointly with Jordan for a Palestinian-Jordanian confederation--a move that could overtake aspects of the negotiations with Israel.

But as Ross left, the Israelis and Palestinians agreed that prospects for a major breakthrough are poor. Each side continues to resist compromise on such central issues as what territory the Palestinians will govern, the status of Jerusalem, which both want as their capital, and security for Israeli settlements on the West Bank.

“If there is no declaration of principles, it means we have not been able to reach agreement on the minimal level, on a starting point for substantive negotiations, on a basis and a framework for autonomy,” Hanan Ashrawi, the spokeswoman for the Palestinian delegation, commented.

“Maybe something else can be worked out--perhaps higher-level contacts, involving the leadership on both sides, perhaps dealing with the permanent status (of the occupied territories) immediately.”

Ashrawi called for “daring alternatives” to the Washington talks to recover the early momentum.

There is no less frustration among Israelis, for Rabin took office a year ago promising an autonomous Palestinian administration in the West Bank and Gaza Strip within nine months. Now, the national consensus he won for territorial concessions may be eroding in the fatigue of prolonged but fruitless negotiations.

Before Ross arrived, Rabin, in what for him was virtually unprecedented criticism of U.S.-sponsored peace talks, railed against American compromise proposals on Palestinian self-government. He also complained about Israel’s having to negotiate with all its Arab neighbors simultaneously and lamented the Palestinians’ inability to make decisions.

On both sides, the feeling remains that without U.S. mediation, progress will be even more difficult.

“What is clear is that all parties are interested in continuing the peace process,” said Israeli Foreign Minister Shimon Peres after the last meeting with Ross. “No one has abandoned it.”

For the United States, however, that poses the question of how much time and effort Christopher and the Clinton Administration as a whole will be willing to expend on such a problematic process.

“The Clinton Administration does not want to be the one that ‘lost the Middle East,’ that lost the chance for peace here,” remarked a European ambassador in Tel Aviv, “and so the tendency will be to try to ‘save’ the talks even after they are dead. . . .

“But perhaps the Arab-Israeli negotiations . . . will take years,” the envoy said. “Again, what effort should the U.S. put into it when there is so much else to do?”

Arabs and Israelis alike detected a downgrading in Christopher’s decision to retain Ross, a senior State Department official in the George Bush Administration, as Middle East coordinator and to delegate responsibility for mediation that James A. Baker III had exercised himself while secretary of state.