How could the worst fears of the right and left in Israel come true simultaneously? How could the last three years of history be all but erased in two days? And what does this have to do with opening a door to a tunnel?

Let’s take the last question first. I was in one of the first tour groups to go through the Old City tunnel. It is a fascinating trip back 2,000 years along the original Herodian stones. The tunnel is so narrow in places that two people can hardly pass each other.

Ridiculously, our group traversed the length of the claustrophobic tunnel and then had to return the way we came, while others waited in the wider passages to let us pass. Why? Because the Arabs had demanded that the exit be closed. The Muslims were convinced it was an Israeli plot to somehow undermine their holy places. It was absurd, of course, but the Israeli government long before the Oslo Accords decided it was wiser to inconvenience tourists and assuage the Muslims’ paranoia by keeping the exit sealed than to start a fight.

So why did the Israeli government decide to open the tunnel now? Obviously, it was meant to send the message that Israel would not be intimidated and that it would broach no challenge to its authority in its capital. The problem with the tunnel decision was the timing. Prime Minister Benjamin Netanyahu has not established any credibility with the Arabs as a man of peace. They view everything he says and does, justifiably or not, as provocative. If he had immediately gone forward with the redeployment in Hebron, met with Yasser Arafat and engaged in substantive negotiations, he might have gotten away with these other actions later. But not now.

The apparent collapse of the peace process and all it accomplished is the realization of the left’s nightmare. The cold peace with the Egyptians shows signs of freezing altogether; the thaw with the rest of the “moderate” Arab states has ceased. The Syrians are making threatening troop movements; the Palestinians may be renewing the intifada and Israel’s image as a peace-seeking entity is in tatters.

The last week has proven equally nightmarish for the Israeli right. Arafat is, as the right wing believed, unable to control the Palestinians. The thousands of guns given to the Palestinian police are being turned on Israelis and the settlements and Jewish holy places isolated in the Palestinian autonomous areas were proven vulnerable.

Both sides should find these events sobering. Opening the tunnel may have been the match thrown into the powder room. But the dry powder was there all along and could have been ignited, perhaps for different reasons, during a Labor government.

Israel’s existence certainly is not threatened, but no one wants to return to the environment that prevailed in the mid-1980s. Unfortunately, Netanyahu has no safe options. Closing the tunnel isn’t the answer. The damage has been done, and reversing the decision now would only feed Muslim paranoia and demonstrate that violence can pressure this government to make concessions.

Netanyahu must take bold action to seize the initiative, despite political and security risks. He should meet with Arafat and, first, demand an end to the violence and, second, declare an immediate willingness to complete negotiations for a final settlement. Each side should promise to refrain from any provocative acts or statements.

Arafat should be told that the redeployment will be carried out in Hebron 30 days from the cessation of violence. If violence ends Oct. 1, redeployment should be completed November 1. If violence continues, the date will continue to be pushed back. By making clear his commitment to fulfill the Israeli obligation and the condition Arafat must meet, Netanyahu will re-establish himself as the one moving the peace process forward, and the ambiguity of Israel’s policy will be removed.

The bolder move is to negotiate a secret agreement with Arafat that says on some date, say April 1, Israel will annex the areas of the West Bank where 70 percent of the settlers live and announce a major building campaign. Arafat will simultaneously declare the establishment of a Palestinian state. The issue of the state’s capital can be deferred, Arafat can be forced to accept a West Bank town or Netanyahu can accept Yossi Beilin’s idea of putting it in an Arab suburb of Jerusalem.

What happens to those isolated settlements and holy places? Hope for the best. Once the Labor government withdrew from those areas, their future was jeopardized. On paper, Arafat will have to guarantee their security, but the promise won’t be worth much. Settlers in the areas Netanyahu does not annex will be in the same boat. They’ll have to decide if it is more important to live on holy soil outside the nation’s borders without security, or on holy soil within the secure borders.

Will this solve the Arab-Israeli conflict? No. Terrorism, rogue states and Islamic radicals will remain threats. This would have been true had Yitzhak Rabin and Shimon Peres completed their mission as well. Still, the steps are the best of a series of bad options.

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