But Eliezer Yaari, Israel director of the New Israel Fund, remains optimistic.

He believes the peace process is "just in the middle of a bump" and that "most Israelis are accepting the fact there will be a Palestinian state. Deep inside, the prime minister knows it."

In fact, in a recent interview in San Francisco, Yaari mentioned a recent poll taken in Israel that indicates few are overly concerned with the slowing peace process.

"People are more concerned about the state of society in Israel," he said. "The gaps between the people are being [cemented], not diminished. Most are seeing that as the major threat to Israel."

To discuss the New Israel Fund's current role in the Jewish state, Yaari spent time in San Francisco last month meeting with Bay Area NIF members.

Established by San Franciscans in 1979, the NIF is a partnership among Israelis, Europeans and North Americans that offers grants to Israeli grassroots groups dedicated to civil rights, equality for women, religious pluralism and coexistence between Jews and Arabs.

The NIF fosters democratic causes to sustain an open society in Israel, which Yaari fears is being divided by infighting.

The split among Israelis can be easily seen in their responses to the Clinton scandal, he said.

For example, his Israeli mother-in-law took the news very personally.

"She is furious about Ms. Lewinsky," Yaari related. "`Look what she did to our president,' she said."

Her reaction is typical of "the way many ordinary Israelis look at Clinton," said Yaari. "They see him as our president, the person who perceived the power behind breakthroughs with Palestinians and Jordanians."

Yet those who are not in favor of the peace process greet the news as a personal blessing.

"For them it is like God's will. They see it as a miracle," he said.

Still, Yaari maintains, Israelis do not want to see the U.S. influence in their country reduced.

"What happened domestically in the U.S. will not influence Israel-U.S. relations," he predicted. "It will not diminish the respect and admiration most Israelis have to the States. It's very fundamental to Israeli culture."

Yaari has a strong attachment to that sense of admiration of the United States. This is apparent as he reminisces about a moment during the Yom Kippur War, when he flew a jet fighter alongside American-made planes.

"I'll never forget the day American pilots arrived with Phantoms. It looked like a miracle," he said.

While the Yom Kippur War opened a new era of U.S.-Israel relations, Yaari said, it also marked an upward turn in anti-Israeli hostility from Israel's neighbors. Yaari now believes the decades of hostility are coming to a close.

In addition to mending Palestinian relations, Israel should also focus on establishing a peace pact with Syria, Yaari suggested.

"Israelis will not accept deterioration in personal security," he said. "Most accept that to close this vicious circle of hostility, we have to get in an agreement with Syria."

But Yaari also stresses that in order for the peace process to continue in the Middle East, domestic harmony among Israelis must be restored.

He maintains that the current government led by Benjamin Netanyahu is stable, but only "as long as the different parties are not hurt by the influence of private interests."

However, he feels "the ability of the prime minister to act upon national [issues] has already been damaged."

Yaari calls for a swell of courage in the face of Israel's problems. "I think there is an understanding between all sides now is the time to act. It's a matter of leadership."

The liberal objectives of the NIF, Yaari says, have been challenged by the vociferous conservatism of the fervently religious.

But that's not his main worry. "The growing concern is about what will happen in the allocation of resources and the education of future generations."