Perhaps it was naive to believe that a final settlement could be reached between the Israelis and Palestinians on the first try.

That's what Oded Eran, the former Israeli ambassador to Jordan and lead negotiator with the Palestinians from 1999 to 2000, had to say in a recent interview in San Francisco.

The career diplomat, who also spoke at a briefing for AIPAC and the Jewish Community Relations Council, divided the negotiations into three major issues, or "baskets," as he called them: territories, Jerusalem and refugees.

And going into the negotiations, he felt confident that he knew every aspect of what Israel's positions were.

"If you told me there would be such significant changes on the Israeli side toward the end of the negotiations, I would have told you, you are dreaming. There were significant changes in all three baskets."

But despite those accommodations, Palestinian Authority President Yasser Arafat did not accept Israel's final offer.

"Of course the question is 'Why?'" Eran asked.

"Did [Arafat] really expect that someday there will be a government that will be willing to go further?"

Eran said even if Arafat did think that would occur, the overwhelming defeat of Prime Minister Ehud Barak by the Israeli public in the elections proved otherwise.

"I've reached the conclusion that Arafat cannot and will not sign an agreement which doesn't fully satisfy all of his demands, meaning all of the territories, all of East Jerusalem, sovereignty over the Temple Mount and the right of return for the refugees."

Since the Israelis would never agree to those demands, Eran does not envision a signed agreement in the near future. Therefore, he argues that the only solution is a short-term one, with both sides agreeing that there are outstanding issues, to be agreed upon on a later date.

"There isn't any other alternative," he said. "Palestinian force will not change the situation. The only way to reach a solution is to reach a dialogue."

Eran, who has been a key player in the Mideast negotiations, spent 10 years in Washington with Israel's Foreign Ministry, holding varied posts, before serving as Israel's ambassador to Jordan from 1997 to 2000. He returned to the United States last year to head the Israeli delegation during talks at Camp David.

He said informal talks between Israelis and Palestinians were held a few weeks ago, but he would not divulge who took part or what was discussed.

Eran said that some type of agreement must be reached soon on some of the territorial aspects, as well as on bilateral relations, water and economic cooperation.

But he supports Israeli Prime Minister Ariel Sharon's position not to negotiate under fire.

"If inadvertently an Israeli tank shell falls on a school and several Palestinian students are killed, would they continue to talk to us?" he asked. "Wouldn't they be so enraged that they would walk away from the table? Why do they expect we would act any differently?"

Eran believes that Arafat can control all the organizations under the aegis of the Palestinian Authority, and that he could take further measures to control the violence of the extremists if he wanted to.

He also scoffed at the notion that the settlements were to blame for the stalemate in negotiations, and therefore disagreed with the recently released Mitchell Report, which called upon Israel to curtail any further building.

In the Oslo pact, "the settlements are an issue which is listed as something to be negotiated as final status," he said.

He does not believe the Sharon government should halt all settlement building, because "I'd be against any move that would be seen as a reward to violence. That is detrimental to reaching an agreement."

Eran said the Israeli public was divided down the middle about the settlements, as the issue was never put to a referendum.

Although President Bush had begun his administration with a much lower level of involvement in the Middle East peace process than his predecessor, Eran said, "The American role is essential. Given the gaps between the two sides, it's impossible to reach a comprehensive agreement without the help of an honest broker or mediator."

What kind of mediation that entails, Eran did not say. "The extent of U.S. involvement depends on the circumstances. I can't prescribe such a measure in advance, [without taking into account] the developments in the region."