JERUSALEM — Relations between the Bush administration and Ariel Sharon's government moved toward a critical test this week as they weighed the CIA as a potential go-between.

They are mulling that option because it has become apparent that the U.S.-brokered cease-fire has failed.

At the weekend summit of the G-8 leading industrialized nations in Genoa, Italy, President Bush for the first time backed the international community's push to send monitors to the strife-torn West Bank and Gaza Strip.

Moreover, reports citing Israeli and Palestinian sources indicated that Bush is willing to have U.S. forces undertake the monitoring.

Sharon long has opposed the idea of international observers, saying Palestinian militants would use them as cover for continued attacks on Israel.

But Sharon on Monday made an important departure, indicating he would be ready to discuss with Washington the nature and deployment of such a U.S.-staffed contingent, presumably drawn from the CIA.

While the CIA has stretched its mission to include facilitating security talks between Israel and the Palestinian Authority — CIA Director George Tenet had been sent to the region to negotiate the cease-fire that has since fallen apart — serving as international observers would move the agency into uncharted territory.

The Palestinians trumpeted the development as a major diplomatic achievement for Palestinian Authority President Yasser Arafat, who for months has demanded international "protection" from Israeli "aggression" against the Palestinians.

Although the CIA has dipped its feet into the Middle East several times during the past few years, Tenet remains hesitant to involve the agency too heavily, and he may fight White House attempts to use his staff in an observer role, sources revealed.

Sharon also made it clear this week he is reluctant to escalate the hostilities.

He made that statement despite mounting political pressure from within his own Likud Party, and despite fears abroad that Israel was only waiting for the G-8 summit to end to launch a major assault on the Palestinian-ruled territories.

"I will not drag this nation into war just because some people are stridently shrieking," the prime minister said Monday.

Sharon was making a thinly veiled reference to the booing he received Sunday night at a session with some 2,500 members of his Likud Party's Central Committee. He had been heckled by party members who disagreed with his policy of restraint in dealing with Palestinian terrorism.

During his speech, Sharon tried to convince the central committee that he has not gone soft on terrorism.

Former Prime Minister Benjamin Netanyahu, who also addressed the delegates, refrained from directly attacking Sharon but presented himself as better able to fight Palestinian terror. Netanyahu is considered a challenge to Sharon's leadership of the party, even though scheduled elections are two years off.

Political analysts were unanimous in describing Netanyahu as the clear winner of the evening's fight.

While professing to urge unity, Netanyahu delivered a withering attack on Sharon's policy of restraint.

"The difference between me and you," Sharon responded to his opponents, raising his voice above their yelling, "is that while you yell, I fight terrorism. Yelling is easy. But the responsibility is on me."

Brave words. But given the palpably hawkish mood of the central committee, there were many in the Israeli political community who believe Sharon would not be able to withstand the pressures from his own ranks, and that he ultimately would increase the scope and intensity of military confrontation with the Palestinians.

Sharon took to the airwaves the next day in an effort to refute such speculation.

He poured scorn on the "shriekers," and sought to assure a worried public that he is not about to give up his "policy of restraint."

As part of that policy, he insisted, Israel would continue to target Palestinian militants directly involved in terrorism.

And he stuck to those words. On Wednesday, Israel tracked and killed a Palestinian activist of a militant Islamic group.

The Israel Defense Force claimed responsibility for the four rockets targeting Salah Darwaza, a 35-year-old Hamas member, near the Al-Ayn refugee camp close to the West Bank city of Nablus.

It was a move Palestinians said would set back peacemaking efforts, and that other militants vowed to avenge.

But Wednesday also brought about a significant Israeli-Palestinian joint effort. Fifty-one intellectuals and political figures on both sides signed on to a declaration calling for an end to the intifada and a return to the negotiating table. It was the first such document signed by Israelis and Palestinians since the bloodshed broke out late last September.

If the declaration — which included three former Israeli Cabinet members and three Palestinian ministers — amounts to anything more than symbolic remains to be seen.

"We know that our efforts will not be enough to end the violence. We are not naïve…[but] we wanted to establish a common denominator between us," ex-Labor minister Yossi Beilin told reporters.

And in an ironic twist — or flip-flopping — Sharon's apparent unpopularity among his fellow rightist party activists may have the unintended effect of strengthening his own unlikely but remarkably resilient alliance with the dovish Foreign Minister Shimon Peres of the Labor Party.

Peres has indicated he fears the peacekeepers will prove as ineffective at containing militants' activities as they were in Lebanon, and be too quick to document Israeli army aggression.

The prime minister meanwhile has reiterated that he will be prepared to make painful diplomatic concessions if a cease-fire and sustained period of quiet are achieved.

And both concede that international monitoring could, arguably, serve to ease tensions and head off clashes or contain them before they expand dangerously. So, on the diplomatic front, Sharon, Peres and Defense Minister Benjamin Ben-Eliezer are maneuvering to obtain the most comfortable — or least uncomfortable — format for bringing international peacekeepers to the region.

In any case, the situation on the ground remains highly explosive.

Israeli security officials managed to prevent another suicide bombing before it could wreak havoc in downtown Haifa on Sunday.

If the outcome had been different, all hope of a helpful contribution by the international community could instantly have been washed away in a new wave of blood.