JERUSALEM — Perhaps only in the Middle East does the mood swing quite so fast.

A week ago, the region was plunged in the deepest despair, with the Israeli government intent on confiscating Arab land in eastern Jerusalem, the Arab states poised to hold an angry emergency summit over the matter, the various bilateral peace talks going nowhere, and the entire peace process in imminent danger of demise.

But now everything is suddenly back on course — and galloping along with a velocity that has taken everyone outside the innermost policymaking circles by surprise.

Israel and the Palestinians are determined to meet their July 1 deadline for implementing the next phase of Palestinian self-rule. Israel and Jordan are speeding the implementation of their peace treaty. Trade with Egypt is flourishing.

And King Hassan II of Morocco is once again dropping hints that the Persian Gulf states are about to create diplomatic ties with Israel.

Perhaps most important, the Israeli-Syrian track is in high gear.

A dose of skepticism, or at least cool caution, is in order, however. This is, after all, the Middle East.

But Israel's political leadership is taking the latest turnabouts in the regional atmosphere with the utmost seriousness.

So, too, are the residents of the Golan Heights, who fear their homes will be lost if and when Israel returns the area to Syria as part of an eventual peace deal.

Still, for the first time in months, a Syrian-Israeli deal seems like an actual possibility.

Labor Party Knesset members, emerging from a briefing with Prime Minister Yitzhak Rabin in the Knesset Monday, said they felt a peace treaty with Syria was a realistic and not-too-distant possibility.

At the briefing, Rabin stressed he was "not interested in any interim accord — only in a full peace treaty." He also reaffirmed his oft-stated pledge that the treaty would be submitted to the nation in a plebiscite before "a single centimeter" of withdrawal on the Golan took place.

At the core of the rapid change of atmosphere is a procedural breakthrough reached last week between Israel and Syria.

The breakthrough was announced with evident gratification by the U.S. State Department, which also said talks between high-ranking military officers of the two sides would resume this month in Washington.

State Department officials, in another sign that progress is afoot, also announced that Secretary of State Warren Christopher is planning another round of regional shuttle diplomacy, which is being preceded this week by a similar trip by his top aide on Middle East affairs, Dennis Ross.

Both Washington and Jerusalem clearly were anxious to play up the good news as a way of playing down the embarrassment caused by last week's land confiscation controversy.

In that drama, which both sides would undoubtedly like to forget, the United States used its veto power for the first time in five years at the U.N. Security Council to block a resolution calling on Israel to rescind its confiscation plans.

But within days, the Israeli government backed down from the confiscation decision in the face of domestic and regional pressures.

Rabin, for his part, came dangerously close to losing his office in a Knesset no-confidence vote related to the planned land seizures.

Only his last-minute agreement to freeze the confiscations persuaded the Arab parties in the Knesset that had introduced the no-confidence motions to back off from joining with the Likud opposition in toppling him.

Now, suddenly, Rabin again is scoring political points — many of which stem from the Syria turnaround.

In a briefing at the Knesset Monday on the Syria situation, Rabin referred to the "understandable concerns" of the Golan settlers but also pointedly cited the 1982 Sinai precedent, when Israel evacuated from the entire Sinai Peninsula as part of its peace deal with Egypt.

For now, prime minister is stressing four separate but interrelated components of the evolving peace deal with Syria.

The components are:

*The border. Here, according to informed sources, Israel flatly rejects Syria's demand that it withdraw to the line of June 4, 1967, which was more westerly, at several key points, than the border established in the early 1920s. The difference between the two lines is about 7 square miles and includes important water sources.

*The withdrawal period. Rabin has spoken of a period of "three years, give or take," during which he will want to see normalized relations in place before the Israel Defense Force undertakes its final pullback from the Golan. The Syrians are believed to be demanding that the withdrawal be completed within a few months.

*Normalization of ties. Syrian President Hafez Assad is reportedly now reconciled to the prospect of exchanging ambassadors, though it is not clear whether he agrees to this taking place before the final withdrawal, as Israel insists.

*Security arrangements. Israel remains adamant that with Syria on the Golan and the IDF back in the valley below after an Israeli withdrawal takes place, demilitarization and limitation-of-forces zones cannot be symmetrical. Israeli media reports say Rabin has dropped earlier demands for a scaling-down of the Syrian armed forces.

The Golan settlers and the Likud-led opposition, seeking to match the pace of diplomatic developments, are quickening their preparations for a massive public campaign against the projected withdrawal.

Residents of the region met with President Ezer Weizman over the weekend to help calm their fears.

Some of the settler leaders are confident that the Israeli public will side with the Golan residents in an eventual plebiscite.

But in the political community — and this includes some Likud members — the assessment is that if a peace treaty involving full normalization is drafted, most Israelis will be hard put to vote against it.