Israel Lulled by the good life

Palestinian and Israeli leaders are engaging in peace talks. Yet, while people on either side of the

It is Friday night in Tel Aviv. I am sitting at a seaside bar, drinking a cocktail and eating seafood. Young men and women are playing beach volleyball nearby; others are rollerblading, cycling or just sauntering around. Israel, at least the secular part of Israel, is enjoying life. A few hours earlier I had been in another world: Jenin, the most northerly town on the West Bank, a place I had been before during the second intifada. Things are different now. There is almost no resistance, though that does not stop night-time Israeli military raids in which people are taken from their homes, into interrogation and most likely to jail.

The journey back from Jenin to Jerusalem - now the only viable crossing into Israel - took more than three hours, even though it is barely 50 miles away. Many roads have been closed off by the army. We went through five checkpoints and were questioned at three. It could have been more; Palestinian cars are stopped at random along the way. All movement between Palestinian towns and villages, and often within them, is controlled. Israeli settlements dominate the landscape. The word settlement is a misnomer, suggesting something temporary; rather, these are collections of suburban gated communities. They have been located in such a way as to separate Palestinian communities from one another. Road signs are first in Hebrew, then in Arabic.

In Ramallah, the notional capital, the people do their best to display nationhood. At the Muqataa compound, where the government resides, a mausoleum to Yasser Arafat has just opened. Two soldiers in Palestinian uniform try to stand to attention, but theirs is more of a slouch.

Everyone, it seems, wants to talk to the Palestinian president, Mahmoud Abbas. On Thursday he was visited by his Ukrainian counterpart. Two days later it was the turn of David Miliband. Israelis like to point out that Condoleezza Rice, the US secretary of state, has spent more time in the Middle East in recent months than the man supposed to be putting it to rights, Tony Blair. On his occasional visits to his reinforced suite at the American Colony Hotel in East Jerusalem, he has been putting together an economic "rescue package" for the Palestinians.

Uniquely ill-suited

All roads, it seems, lead to Annapolis, a quaint naval town just outside the US capital, where, on 26 November, George W Bush is expected to invite Israelis and Palestinians to sign a declaration. Ahead of that meeting, I was part of a group invited to Jerusalem to talk to some of the most influential players in Israeli politics and security - from cabinet moderates such as the deputy prime minister Haim Ramon to the arch-neocon, the man who will become leader again if it all falls apart - Binyamin "Bibi" Netanyahu.

Their attitudes to the Palestinians may differ, but the prognoses of doves and hawks alike are strikingly similar. Ehud Olmert's grand coalition is weak (as all Israeli governments are nowadays, thanks to the constitution, which allows minor parties a pivotal role); Abbas's Palestinian Authority is even weaker. Both sides are, one Israeli figure told us, "uniquely ill-suited" to conduct meaningful negotiations.

Still, they are trying. Olmert and Abbas have met regularly over the past few months. The Israelis talk of the Palestinian leader as a "good partner". Old taboos appear to have been broken. The future status of Jerusalem is openly discussed (though it is as far away from resolution as it has ever been). The Israelis talk of international troops overseeing the Palestinian territories. A few years ago they would have seen that as an insult. The choreography of this latest initiative is intricate. At Annapolis they will be asked to pledge "immediate and continuous" negotiations, leading to a final status agreement.

Yet ask Israeli ministers whether any of this will work, and they smile and say "no". So what is the point of going? Various answers are given, ranging from "There's no reason not to" and "We don't want to insult Bush" to "We must prop up Abbas". The Israelis, together with the Americans and governments of other countries, have convinced themselves that if they don't help the Fatah-led government on the West Bank, Hamas will take over by force, just as it did in Gaza. One security figure told us that only the Israeli army stood in the way of a Palestinian implosion. "The Palestinians have to choose whether they want to live in Mogadishu or Dubai," he said.

This argument is used to justify the economic blockade of Gaza, which, according to official figures, has left more than 80 per cent of inhabitants below the poverty line. Some senior Israelis, though not all, have convinced themselves that Palestinians in Gaza will blame Hamas, rather than Israel, for the way their strip of land is being choked and will turn back to Fatah.

Olmert has more invested in a deal with Abbas than his more sceptical cabinet colleagues. He knows that, for it to work, he has to give something meaningful to bolster the Palestinian president. As one Israeli involved in the negotiations remarked: "We're having to write Abbas's victory speech in Annapolis." Yet Olmert's power base is too weak for him to make any concessions beyond the most cursory - a few hundred prisoners let out or a few roadblocks dismantled (there are 500 in total, according to the UN), or a freeze in the 2008 budget on settlement construction.

The real problem lies in the absence of any strong self-interest on the part of Israelis themselves. Israel is going through one of its rare periods of relative calm. The mood is quite different from that of my last trip, a year ago. Then it was reeling from its botched war in Lebanon, several political corruption scandals and financial mal aise. Now the economy is booming; liberalisation of a number of industries has helped boost growth rates. Once a state that prided itself on collectivism, Israel is now one of the most unequal. Money is being spent with alacrity. Israelis have flocked back to outdoor cafes and restaurants, no longer so fearful of suicide bombers.

The most important reason for the new mood is the "success" of the barrier that has been constructed to separate Israel from the West Bank. In highly populated areas such as Jerusalem, it is reminiscent of the Berlin Wall. One of the main access roads taking Israelis between Jerusalem and Tel Aviv could just as well have been one of the transit routes for West Germans travelling to West Berlin. Apart from the Qassam rockets fired from Gaza into the southern Israeli town of Sderot, attacks on Israelis have all but ceased.

Ignorance is bliss

An entire generation of Israelis has reached adulthood without any physical contact with Palestinians or first-hand knowledge of life inside the West Bank or Gaza. Before the outbreak of the second intifada in 2000, some in the older generation would go over for a spot of shopping or to wander around. Now, apart from settlers, who are driven to and fro in armed convoys, almost no Israelis venture over the border.

According to Dr Mina Tzemach, a veteran opinion pollster, most Israelis want their leaders to go to Annapolis. Intriguingly, an almost identical number assume that the talks will fail. The younger generation, she says, is increasingly hostile to cutting a deal with the Palestinians. The public has convinced itself that the withdrawal of the small number of Israeli settlers from Gaza - Ariel Sharon's last major act as prime minister - has been a disaster. The Hamas coup has reinforced a stereotype that as soon as Israeli backs are turned, Palestinians descend into extremism and violence. Tzemach's polling points to another paradox. Israelis want, in the long term, the same kind of "normal life" as enjoyed by Americans and Europeans. They accept that peace and security, the two watchwords of their politics, remain fragile as long as Palestinians are oppressed and angry. But in the short term they are content with their lot.

In any event, by far the biggest concern in political circles is now Iran, or "the state from which all evil stems", as one minister put it. Security officials and politicians say Tehran will have acquired the technology to produce a nuclear weapon by the end of 2009 at the latest. They work from the assumption that either the US or Israel will launch a military attack before then in order to stop the nuclear programme.

In a few days' time, Olmert and Abbas will meet, shake hands, applaud an exhortatory speech from Bush, and return home to begin what will be described as a crucial phase in the peace process. Then what? As things stand, not much - which won't unduly trouble the rollerbladers on Tel Aviv's promenade.