JERUSALEM — With a new strategic balance in the Middle East and pressure building to implement a U.S.-backed peace plan, next week's meeting between Prime Minister Ariel Sharon and President Bush could be their most important to date.

Neither Israelis nor Palestinians came away entirely pleased from Secretary of State Colin Powell's visit to the Mideast over the weekend.

The visit made clear that the United States is determined to keep pressing for Israeli-Palestinian peace and that Bush intends to be personally involved.

But Palestinians had expected Powell to produce more sweeping Israeli concessions, while Israel was left wondering if the United States will indeed force the Palestinians to undertake a serious crackdown on terror.

Analysts believe the moment of truth will come Tuesday, when the Israeli prime minister meets Bush at the White House.

U.S. officials say Bush is set to take up the sensitive issue of Israeli settlements in the West Bank and Gaza Strip and, in general, may seek greater Israeli flexibility on the "road map" to peace.

In dealing with Iraq, Syria and Islamist terrorism, the United States is taking care of the main strategic threats to Israel, these officials argue — and it's now time for Israel to be more forthcoming on peacemaking with the Palestinians.

The question is whether Bush will take that position. Will he be influenced by neoconservatives, who argue that Israel must fall in line with America's grand vision of a new, more stable Middle East, or swayed by the Republican right wing, which supports Israel and its settlement activity and which Israeli settlers are trying to mobilize?

Indeed, the way the president leans in the meeting with Sharon could decide the road map's fate.

Sharon has yet to accept the U.S.-backed road map, saying only that Israel backs the diplomatic vision Bush laid out in a policy speech last June 24.

The road map was to be the mechanism to implement the June 24 vision, but Israel contends that the plan differs from the Bush speech in important respects.

Sharon has placed two tough demands in the way of the plan: The Palestinians must not only stop the violence but disarm and dismantle the terrorist organizations, as they have pledged repeatedly to do. In addition, from the start they must waive their demand that millions of Palestinian refugees from Israel's 1948 War of Independence, along with their descendants, be allowed to return to their former homes inside Israel.

Some argue that Sharon is using a familiar technique before his White House visit — striking a tough pose for his domestic audience, only to magnanimously "concede" certain issues when he meets with Bush.

Though Powell managed to set up a meeting between Sharon and the new Palestinian Authority prime minister, Mahmoud Abbas, he made little headway on substance.

Following Powell's visit, the Mideast was engulfed in another act of terrorism — the bombing of three residential compounds in Riyadh, Saudi Arabia. At least 34 people were killed, including about eight Americans. Authorities suggested that the attacks bore the imprint of al-Qaida.

Powell's Israel sojourn led Israel to make a number of goodwill gestures — releasing 180 Palestinian prisoners, allowing more Palestinian laborers and businessmen to work in Israel and easing some restrictions on Palestinian movement in the West Bank and Gaza Strip.

Shortly afterward, however, a full closure was reimposed on the territories because of warnings that terrorists planned to carry out attacks in Jerusalem and Tel Aviv.

Sharon made clear to Powell that there would be no Israeli troop withdrawal until there were real signs that the Palestinians were cracking down on terror.

Sharon also explained to Powell why Israel insists that the Palestinians disarm and dismantle terror groups like Hamas, Islamic Jihad and the al-Aksa Brigades.

If Abbas merely negotiates a cease-fire with these groups, Sharon says, they will use the lull to regroup — and launch new terror against Israel in the future.

Foreign Minister Silvan Shalom explained Israel's insistence that the Palestinians waive the "right of return."

The road map asks Israel to commit to a Palestinian state without the issue of the right of return being resolved, he argued. This had not been the case in the Oslo peace process, where the Palestinians were to be rewarded with statehood only after the refugee issue was resolved, Shalom said.

If they get their state first, Shalom asked, what incentive would the Palestinians have to waive their demand — whose implementation would mean the demographic destruction of the Jewish state?

In his public statements, at least, Powell seemed to back the Israeli position on terror.

The United States must "see rapid, decisive action by the Palestinians to disarm and dismantle the terrorist infrastructure," Powell declared at a news conference in Jerusalem. "Without such action, our best efforts will fail."

Privately, though, he expressed doubts that Abbas could forcibly dismantle the terrorist groups. Israeli officials fear that if Abbas negotiates a cease-fire with the groups that holds for any length of time, the Americans will demand a major Israeli troop withdrawal in response.

Powell did not address the right-of-return issue directly. However, given his frequent statement that there's enough agreement between the parties to make a start on the peace plan — without letting more contentious issues bog them down now — his perspective seems clear.

Some say careful attention to language will be key to deciphering the outcome of next week's crucial meeting in the White House.

While Bush may indeed pressure Sharon to do more, analysts say he is not likely to seek Sharon's direct endorsement of the plan, instead encouraging more practical steps on the ground.

That would give the United States the progress it seeks and create an environment in which the new Palestinian Authority prime minister potentially could thrive.

Sharon, for his part, would get credit for taking steps that please the United States, without expending political capital by directly supporting the road map.

Still, such formulas can't work forever. Eventually Sharon will have to vote yes or no on the plan, said David Makovsky, senior fellow at the Washington Institute for Near East Policy.

"The administration will understand anything that deals with security realities," he said. "But actions that are not seen as security-related but as ideological or political will not be seen in the same friendly light.''