jerusalem | Israelis have a long score to settle with Saddam Hussein: The former Iraqi dictator promised to destroy the Jewish state, fired 39 Scud missiles at Israeli cities during the Persian Gulf War and paid hundreds of thousands of dollars to families of Palestinian suicide bombers.

So, not surprisingly, Israelis were jubilant at Sunday’s news of Saddam’s capture by American forces in Iraq, a mood reflected by the Tel Aviv stock exchange, which rose more than 3 percent on the day.

But seasoned Israeli analysts are less euphoric. While acknowledging a best-case scenario in which Saddam’s capture spurs the Israeli-Palestinian peace track, puts pressure on Syria to seek a peace agreement and enhances Israel’s strategic position in the region, they say that much still has to happen in Iraq for that scenario to materialize.

The key question, they say, is whether Saddam’s capture leads to a significant reduction in the number of guerrilla attacks on U.S. and allied forces and leads to a more stable, pro-American Iraqi regime.

If that happens, the benefits for Israel could be enormous. But if the attrition and chaos continue, the positive impact of Saddam’s capture could dissipate quickly.

On the face of it, Saddam’s final, ignominious exit should put more pressure on the Palestinians to seek an accommodation with Israel.

The radical Arab forces pressing the Palestinians to reject all peace offers have been weakened, and Saddam’s capture further reduces the radical hinterland Palestinian hard-liners look to for support.

Conversely, it strengthens America’s regional standing and adds weight to the U.S.-sponsored “road map” for Israeli-Palestinian peace.

In the Ma’ariv newspaper, analyst Ben Caspit wrote that there is an Israeli establishment assessment that “the removal of Saddam from the catalogue of burning problems will release new energy in America’s involvement here.”

Caspit assumes that the road map will be strengthened, the Palestinian Authority and Israeli prime ministers — Ahmed Qurei and Ariel Sharon — will be forced to deal with each other, and Sharon’s putative unilateral steps will be deferred.

But will the Americans, still embroiled in Iraq, have the resolve to exploit the moment to pressure both Palestinians and Israelis to move forward? Israeli Cabinet ministers think not.

On the contrary, they expect American pressure on Israel to ease. Public Security Minister Tzachi Hanegbi, for example, believes the Untied States now will be “far more confident in carrying out its campaign against the ‘Axis of Evil,’ ” and give Israel more leeway in fighting terror.

In congratulating President Bush, Sharon suggested that Saddam’s capture could herald the beginning of the end for dictatorships throughout the Middle East, with major strategic benefits for Israel.

In a veiled allusion to neighboring Syria, Sharon said. “The dictatorships, and especially those tainted by terror, learned an historic lesson today: The enlightened international community showed that it can defend freedom and defeat terror when it has to.”

If, despite the expert assessments, the United States is able, within a year or so, to put into place a genuine, functioning democracy in Iraq, that would send a very important message across the Middle East. There’s even an outside chance that a pro-American Iraq might even seek relations with Israel.

And that, in turn, would be certain to impact on Bashar Assad’s Syria. In a recent New York Times interview, Assad spoke of peace with Israel as a strategic choice his father had made, and one he intended to pursue.

A democratic Iraq, at peace with Israel, would give him added incentive.

But, say the experts, capturing Saddam is only one necessary step in that direction. There is still a long way to go.

Leslie Susser is the diplomatic correspondent for the Jerusalem Report.

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