PERSPECTIVE ON MIDEAST PEACE : A Logjam in Need of a U.S. Nudge : Israeli-PLO negotiations are stuck over how much concession is enough; meanwhile, stakes rise in ‘Greater Jerusalem.’

Don’t be fooled by the applause that accompanied the Arafat-Peres signing of a partial agreement in Cairo two weeks ago. The Israeli-Palestinian peace process is in trouble and may flounder without U.S. leadership.

Five months after the signing of the Declaration of Principles between Israel and the Palestine Liberation Organization, the process of negotiating disengagement and peace has yet to produce anything concrete. This inability to move forward is a function of problems inherent in the negotiating partners themselves: the weakness of both the Labor government of Israel and the PLO, and the asymmetry in the power relationship between them.

Simply put, Israel holds all the cards: It controls all of the Palestinian territory and all aspects of daily life there. As a result, the negotiating process has been reduced to Palestinian reactions to Israeli positions, all of which are presented as “firm and non-negotiable.” The only options available to the Palestinian negotiators are saying “no” and threatening to abort the process, or attempting to whittle away at the “firm” Israeli positions in hopes of winning some face-saving gestures.

Israeli Foreign Minister Shimon Peres said as much in a Feb. 11 interview when he observed, “These negotiations are with ourselves. The Palestinians don’t have so much to give us.”

So the fate of the process rests in Israeli goodwill and the willingness of the Labor government to respect Palestinian rights and dignity and to give the Palestinians enough concessions to maintain the integrity of the negotiations.

This leads to the second difficulty facing the peace process, which is the belief of both Yitzhak Rabin and Yasser Arafat that they have only a tenuous hold over their respective constituencies. While both leaders are invested in the process and publicly recognize the need to support each other’s position, Rabin’s government seems to be afraid of giving more than it has, and the PLO--as Peres accurately expressed it--doesn’t have much to give.

The product of this rather weak recipe has been an unpalatable stew.

After the Cairo signing, the Israeli press gloated that Israel got everything it wanted--control of all security arrangements--while making few, primarily symbolic concessions. The Arab and Palestinian press chafed at the insult of the “humiliating” security agreement. Palestinian and Israeli extremists, sensing the weakness in the process, have used violence and harsh rhetoric to agitate popular fears and further constrain their leaders.

If left alone under this scenario, the Israeli and Palestinian negotiators cannot successfully complete an agreement that meets both parties’ minimal needs. Outside assistance, and specifically U.S. leadership, will be required to give each side the strength and support it needs to move forward.

While the United States has until now refused to become engaged in the negotiating process and will not put pressure on Israel to make concessions, there are at least two steps it could take to help bring the process to fruition.

First, the situation with regard to Jerusalem: All parties agreed that the question of Jerusalem would be left for final-stage negotiations, and that no unilateral steps would be taken to alter conditions on the ground during the negotiating process. Nevertheless, Israel acknowledges that it is constructing 15,000 new housing units (in addition to completing the 13,500 units begun by the Likud government) in what it describes as Greater Jerusalem--an expanded area stretching at some points more than six miles from the historic city. This building, coupled with the “security roads” and tunnels that Israel is constructing to connect settlements with each other and Jerusalem, is cutting the West Bank into cantons and serves as a daily reminder to the Palestinians of their lack of control over their lives; it sharpens their fear of never gaining any semblance of control over their territory.

A firm and public U.S. position against the construction within the occupied territories would enhance the integrity of the process and give the powerless Palestinians some sense of support in their quest for a just and lasting agreement.

Second, a continuing concern of the Palestinians has been their inability to gain direct access to foreign markets during the 27 years of Israeli occupation. A single U.S. announcement that the terms of the U.S.-Israel free-trade agreement would apply to Palestinian products exported from the autonomous regions would go a long way toward assuring Palestinians that they can benefit economically from peace.

It is axiomatic that an enduring peace settlement is one in which both victor and vanquished emerge strengthened. So far, negotiations within the context of the current, uneven Israeli-Palestinian relationship and the lack of outside support have served to enhance Israeli strength while further eroding the Palestinian position. But a weakened Palestinian authority will not and cannot produce peace.

Since both leaderships feel compelled to push the process forward, it may be possible for Israel to press the Palestinians to agree to its terms for autonomy and strip the Palestinians of even the trappings of sovereignty and dignity. But such an accord would be impossible for the PLO to sell to its already restless and angry constituency. Israeli Environment Minister Yossi Sarid recognized this point when he said, “When we are talking about security matters, we have to twist the arms of our dialogue partners. But when we twist the arms, we have to be careful not to break them.”

Prime Minister Rabin may feel that he is unable to offer more to the Palestinians, and Chairman Arafat surely feels that he doesn’t have nearly enough to offer the Palestinians. Without directly entering the process, the United States can--must--take steps that will open up this impasse.