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JERUSALEM — It appeared for a while this week that Israel and its neighbors were the only countries unable to accept that there might not be a new Gulf War.

Frustrated Palestinians and Jordanians proceeded with violent demonstrations to show solidarity with Iraq — as if no agreement had been signed, as if Clinton had not given it his tentative support.

As Palestinian Authority Chairman Yasser Arafat was proclaiming that the agreement U.N. Secretary-General Kofi Annan reached Sunday with Saddam Hussein was "a very important start to achieving real peace," university students in Gaza City burned Israeli and American flags, chanting: "We love you, Saddam, we will fight for you!"

And similarly in Jordan, security forces clamped a curfew on the southern city of Ma'an to put an end to weekend pro-Iraqi demonstrations.

In Israel, the distribution of gas masks to the population continued. Israeli leaders continued to talk of the need for preparedness.

Prime Minister Benjamin Netanyahu told the Knesset Foreign Affairs and Defense Committee that while the Iraqi threat has been eliminated in the short run, Israel must get used to the concept of a Middle East with missiles as long as Saddam remains in power.

The premier is optimistic that Clinton would ensure that the conditions set by the United States regarding Iraqi weapons inspections are fulfilled.

Even with the crisis over, it exposed unavoidable truths about prospects for Mideast peace.

The Gulf War was a window of opportunity that set the peace process in motion.

This time, with Clinton unable to assemble the broad Arab coalition that backed the earlier conflict, the confrontation with Saddam sent lasting shock waves throughout the region.

Demonstrations held by Palestinians and Jordanians were more an expression of frustration with their leadership and the stalemated peace process than a show of real solidarity with Saddam.

Frustration was strongest among the Palestinians because of the 11-month-long impasse in negotiations with Israel and a sense that Arafat is not delivering the goods.

Before the latest crisis, the Clinton administration had been pushing both sides back to the table.

Arafat instructed his security forces not to let the demonstrations get out of hand. At least one pirate radio station and one pirate television station were closed after they carried pro-Iraqi and anti-American programs.

In Jordan, the frustration is more of an economic nature. Many feel they have yet to see the fruits of the peace signed with Israel in 1994.

Ma'an, with a population of 100,000, was the scene of anti-government protests after the so-called bread riots of two years ago, which came after authorities cut bread subsidies.

The Jordanian authorities also found themselves in a delicate position. Because of the peace agreement with Israel and the growing political and economic dependency on the United States, King Hussein could not repeat the 1991 Gulf War scenario and support Saddam.

But he could not ignore certain economic facts of life. Although Hussein and Saddam have not exchanged words since the Gulf War, their two countries share a long border and engage in lively trade.

Dozens of trucks loaded with agricultural and food products cross the border daily from Jordan into Iraq . Annual Jordanian exports to Iraq stand at $450 million, compared to the $30 million in total trade volume between Israel and Jordan.

Jordan still receives most of its oil supplies from Iraq, at half price.

The main reason for Jordanian concern during the latest crisis was the fear that once hostilities broke out, hundreds of thousands of Iraqi refugees might cross the border into Jordan and create instability within the monarchy.

Even so, Jordanian officials could not tolerate the demonstrations because they were well aware that the demonstrations could soon turn against the regime itself.

Palestinian and Israeli officials are beginning to realize that the peace process may soon return to center stage.

Arafat this week welcomed the possibility of an agreement that could defuse the Iraqi crisis. He said he hoped it would allow for renewed attention on the Israeli-Palestinian negotiations.

Netanyahu rushed to propose in a television interview Monday that the two sides engage in Camp David-style discussions to reach a final settlement. And at the beginning of the week, Israeli and Palestinian negotiators resumed talks with the U.S. ambassador to Israel.

Ziad Abu Ziad, a member of the Palestinian legislative council, reacted on behalf of Arafat that the Palestinian Authority would be willing to join in such negotiations — on the condition that Israel honor its previous commitments to the Palestinians.

All of which sounds like old times — before Saddam stole all the headlines.