After seven lean years in Israeli-Palestinian relations, Israel, the United States and moderate Palestinians are moving to create a new dynamic.

As part of the latest initiative, Israel will ease its control of the West Bank, the Palestinians will guarantee security and the United States will provide an umbrella for talks on a final peace deal.

In a meeting Monday, July 16 in Jerusalem, Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas agreed to accelerate peace talks.

Several hours later, President Bush issued a major policy statement in Washington, calling for a regional peace conference to help the parties “move forward on a successful path toward a Palestinian state.”

Bush promised $190 million in American aid, $228 million in loans and $80 million to beef up Palestinian security forces being trained by U.S. Gen. Keith Dayton. He also announced plans for an international conference in the fall.

Tuesday, however, Israel reiterated that it would not deal with Abbas about so-called final negotiations. And Olmert also renewed Israel’s demand that Abbas clamp down on terror, adding that if Fatah tried to patch its differences with Hamas and reestablish a joint government, the Jewish state would break off any peace talks.

Still, it has been a long time since the key players have shown such determination to move ahead.

The split in Palestinian ranks could make progress difficult, however. The move comes a month after Hamas took control of Gaza and Abbas established an emergency government.

To prove that Abbas will not be able deliver without them, Hamas fundamentalists might try to launch a new wave of terror from the West Bank against Israeli targets.

In his meeting with the Palestinian president, Olmert announced a string of goodwill gestures designed to strengthen Abbas’ position on the Palestinian street, including freeing 250 Palestinian prisoners and calling off the hunt for 180 wanted men from the Fatah-affiliated al-Aksa Brigades.

Olmert reiterated Israel’s demand that Abbas establish a single Palestinian armed force responsible for law and order.

For his part, Abbas called for accelerated talks on a final peace agreement through public and secret channels. Without a concerted effort to reach a deal, all Israel’s gestures would be meaningless, he said. Olmert retorted that it is still premature to focus on core issues, like final borders, Jerusalem and refugees, and Abbas first needed to demonstrate control over the West Bank.

In the past, Abbas repeatedly failed to meet Israel’s minimum conditions for serious dialogue, so much so that former Prime Minister Ariel Sharon once called him a “chick without feathers.” This time, though, there are signs that things could be different.

In the wake of Israel’s amnesty for the wanted men, most have handed in their weapons to Abbas’ central Palestinian Authority. Many will be incorporated into the official Palestinian security force, which would then be strong enough to maintain law and order in the West Bank and keep Hamas in check, the thinking goes.

If Abbas can create what he calls “one gun,” a single Palestinian armed force capable of eradicating terror against Israel, Olmert will be able to lift roadblocks, take Israeli forces out of Palestinian cities and enable a much greater degree of freedom of movement in the West Bank.

In his speech, Bush threw America’s considerable weight behind Abbas and his prime minister, Salaam Fayyad. In addition to the $270 million in American aid, he promised the $228 million in loans.

The diplomatic effort would include a major regional conference this autumn chaired by the United States. He called on Arab states to end their refusal to recognize Israel ahead of the conference.

Bush made clear that the United States would be ready to help press for a final peace deal, as the Palestinians are demanding of Israel.

But there was a caveat: The Palestinians will have to choose between statehood and terror. “With proper foundations, we can soon begin negotiations on the establishment of a Palestinian state,” Bush declared.

The president is gambling on a weak Palestinian leader who has not delivered on any of his promises in the past. Then again, Abbas never received this kind of American backing before. Whether it is enough to end the seven-year diplomatic drought remains to be seen.