The Iron Wall: Israel and the Arab World Avi Shlaim Allen Lane The Penguin Press, 688pp, £25 ISBN 071399410X

This book is profoundly dispiriting. Professor Avi Shlaim knows as much as anyone about the relationship between Israel and the Arab world. He is impressively fair and open-minded; always able to understand, if not condone, the vagaries of Jewish or Arab policies. He analyses the past 50 years with lucidity and an admirable sense of proportion. He ends on a note of optimism. And he totally fails to convince this reader at least that such optimism can be justified.

The Israeli problem is one of terrifying complexity; a kaleidoscope in which a multitude of fluctuating interests shift restlessly, forming now one pattern, now another, but never for an instant settled. It is also of a still more terrifying simplicity. The Arabs believe the Jews have no business to be in the Middle East, certainly not within their present borders. The Jews believe that they have a God-given right to be there and that something very close to their present borders is essential for their safety. The two positions are irreconcilable. In 1956, Moshe Dayan called on his fellow countrymen not to be afraid "to see the hatred that accompanies and consumes the lives of hundreds of thousands of Arabs who sit all round us and await the moment when their hand will be able to reach out blood". Much has happened since then; but many (if not most) Jews believe that the hatred still burns unappeased.

Shlaim is a revisionist historian who examines and frequently rejects the myths that have grown up in the half-century of Israel's existence. Most of these are the creation of Jewish propagandists, who have proved to be far more skilled than their Arab counterparts at presenting the facts in a favourable light. The 1948 war of independence, for instance, is traditionally depicted as an unequal struggle "between a Jewish David and an Arab Goliath. The infant Jewish state fought a desperate, heroic and ultimately successful battle for survival against overwhelming odds . . . After the war, Israel's leaders sought peace with all their heart and with all their might, but there was no one to talk with on the other side." This is not wholly false, Shlaim concludes, but it is a "subjective and selective interpretation" of the facts. Those facts are that, for much of the war, the Israeli Defence Force was numerically and materially superior to its Arab enemy; after the war, the Israelis were as intransigent as the Arabs, and quite as much to blame for failing to achieve a lasting peace.

The history of Arab-Israeli relations is a melancholy catalogue of "if onlys". If only Ben-Gurion had been prepared to do a deal with Nasser in 1995 . . . ; if only Golda Meir had been more responsive to the way forward offered by the Jarring mission . . . ; if only Yitzhak Rabin had not died from an assassin's bullet . . . Yet for every "if only", there is a "but then": whenever one side was ready to come to terms, the other balked; whenever the forces of moderation seemed to be prevailing, a revolution or political coup would snatch away their victory. It was like one of those maddening games one played as a child, in which four balls had to be manoeuvred into holes. Sometimes two balls fell into place, even three, but the fourth remained recalcitrant and then the other ones would slip away, and one was back at the starting line again.

The ball that most obstinately refuses to fall into place is Jerusalem. Here is another "if only" - if only Moshe Sharett's arguments had prevailed over Ben-Gurion's in 1949, Israel would have accepted the internationalisation of Jerusalem under UN rule. By the end of the Six Day War, it was too late; Israelis of almost every political complexion were agreed that Jerusalem in its entirety must be their eternal capital; Christians and Muslims might have access to their holy places, but only as ordained by the masters of the city. Rabin and Shimon Peres might still have slipped through some compromise, but after three years of Binyamin Netanyahu, with his ruthless expropriation of Arab lands and the construction of new housing for Israeli settlers, the possibility of a solution acceptable both to Jews and Arabs seems as remote as ever.

Netanyahu, writes Shlaim, "was not as bad as he seemed when he stood for election to the top post in Israeli politics on 29 May 1996. He was much worse." Shlaim is too wise a man and too sophisticated a historian to think in terms of heroes and villains, but Netanyahu almost emerges as the latter - the "destroyer of dreams" whose "hatred and bitter animosity" towards the Palestinians undid the patient work of his predecessors. Netanyahu thrust Israel back to the policy of the "iron wall", which, in 1923, Ze'ev Jaboninsky had decreed must be erected around the Jewish state before any deal with the Arabs could be safely contemplated. The men who deserve credit, Shlaim believes, are those who believed that the wall could be dismantled: King Hussein or Anwar Sadat for the Arabs; Abba Eban, Levi Eshkol and, in the later stages of his tragically truncated career, Rabin for the Jews - men of vision who could look beyond short-term arguments of prestige and power to the more distant goal of an enduring peace.

Some Pope or other is alleged to have said once that "there were two possible solutions to the Arab-Israeli conflict: the realistic and the miraculous". The realistic solution involved divine intervention; the miraculous involved a voluntary agreement between the parties themselves. Shlaim is less pessimistic. The election of Ehud Barak as prime minister of Israel in 1999, he claims, was more than a political earthquake; it was "the sunrise after three dark and terrible years during which Israel had been led by the unreconstructed proponents of the iron wall". One must hope desperately that he is right and that this is not yet another false dawn. But the memory that resounds most potently after reading this book is the bleak question that Sharett posed himself in 1955: "What is our vision on the Earth - war to the end of all generations and life by the sword?"

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