A cardinal principle in the resolution of conflicts is that, when negotiating a settlement between warring parties, you negotiate one step at a time.

First, you focus on the issues where there is agreement: this helps you build trust, and you often leave the more difficult matters of conflict to resolve later on, after trusting relationships have been developed.

That logic works, most certainly in the short run, even in the Middle East.

Israelis and Arabs would simply rather not run each other’s affairs. Both peoples can agree on that for openers.

Indeed, during the seven years of the Oslo peace process, since its genesis in 1993, Israel has relinquished control over the civil affairs of more than two million Arabs, thereby facilitating the creation of an independent entity, which is now equipped with its own "strong police force" of 50,000 Palestinian Arab armed personnel. The vision of a "strong police force" for an autonomous Palestinian Arab entity had first been mentioned in the Camp David agreements that were initialed between Israeli Prime Minister Begin and Egyptian President Sadat on the White House lawn in April, 1979.

In addition, Israel and this new autonomous Palestin-ian Arab entity have also engaged in a series of economic agreements that have brought wealth and prosperity to substantial sections of the Israeli and Palestinian Arab business communities.

Yet the short-term trust that has been forged over seven years has done little to solve the more difficult issues of the peace process that have been postponed for seven years: the positions of Israel and the autonomous Palestin-ian entity are still diametrically opposed on the issues of Jerusalem and the Arab refugees.

Israel claims all of Jerusalem as its capital. Arafat and all members of the PLO and the Palestinian Authority define Jerusalem, all of Jerusalem, as the capital of the Palestinian entity. At no time has Arafat, or any PA official or Arab leader, ever stated that only "East Jerusalem" or "Arab neighborhoods in Jerusalem" would constitute a capital for the Palestinian Arab entity.

Meanwhile, Arab refugees have wallowed in refugee camps since half a million Arabs left their homes in Pale-stine during the 1948 war waiting to realize the "inalienable right of return" to their homes from 1948, as defin-ed by UN resolution #194. UNRWA, the United Nations Relief and Works Agency, which has operated these camps since 1950, now estimates the number of Palestinian Arab refugees at 3.5 million, one million of whom continue to live in the "temporary shelters" provided by UNRWA in Lebanon, Syria, Jordan, the West Bank, and Gaza.

Israel views the refugees as people who left during a time of war, 52 years ago, whom Israel will not permit to return. From the point of view of the Jewish state, there is a new Palestinian entity that can absorb them.

However, the absolute PLO position is that the refu-gees have the right to return to their villages from 1948, even if their villages have meanwhile absorbed millions of Jewish refugees into the Jewish state. In April 2000, the PLO’s department of refugee affairs issued a 40-page booklet entitled The Palestinian Refugees Fact File to promote the "right of return" for all Palestinian refugees.

In December, 1993, one of the architects of the Oslo accords, Dr. Yossi Beilin, then Israeli deputy foreign minister, told me, in a taped interview together with other foreign correspondents, that the first thing that the new provisional Palestinian National Authority would tackle would be a solution to the Palestinian Arab refugees, to absorb them into the new Palestinian Arab entity.

However, in May, 1994, the first act of the new Palestin-ian National Authority, when it met at the first session of the Palestinian Legislative Council, was to declare that the new Palestinian entity would not absorb the Palestinian refugees, since they have the "inalienable right" to return to the homes that they left in 1948, all of which lie within Israel proper.

From a point of view of conflict resolution, it would be one thing if these two parties, who disagree over final status of a peace agreement, were left to work out their differences between themselves.

However, the entire world supports the PLO positions. Near unanimous UN resolutions since 1967 declare that Israel has no right to assert its sovereignty over Jerusalem. Near unanimous UN resolutions since 1949 endorse the position that Palestinian Arab refugees possess the "in-alienable right of return" to the homes that they left in 1948. Both positions are supported by the US and Canada.

Even the 1995 US legislation that requires the US to move its embassy to Jerusalem does not carry with it any Ameri-can recognition for Israeli sovereignty over Jerusalem.

In other words, the final status of the Middle East peace process pits Israel versus world opinion. A hard conflict to resolve.

The PLO invokes these UN resolutions to support its position. Even the Iranian/Syrian sponsored Islamic Hezbollah organization in Lebanon invokes these UN resolutions. In the name of UN resolutions, Hezbollah declares that it will help liberate Jerusalem from Israeli control and help the Palestinian Arab refugees to return to their homes from 1948. Indeed, on 24 May 2000, the day of the IDF withdrawal from southern Lebanon, Hezbollah leaders conducted an impromptu press conference at the "good fence" near Metullah to declare that Hezbollah would now spearhead the drive in the world to force Israel to keep UN resolutions that recognize the "right of return" and reject Israel’s sovereignty over Jerusalem.

In other words, the steps that that four Israeli prime ministers have taken to implement the terms of the Oslo accords can never satisfy the goals of the future Palestinian Arab entity.

On 15 May 2000, the day defined by the PLO as the "nakba," their day to mourn the creation of a Jewish state, Arafat dispatched Walid Awad, an official from the Palestinian Authority Ministry of Information, to address the press at the Beit Agron International Press Center in Jerusalem. Awad laid down the minimal PLO terms for peace: abandon all Jewish neighborhoods taken in Jerusalem and the West Bank since 1967 and recognize the in-principle "right of return" for all Palestinian Arab refugees who wish to return to their villages from 1948. Awad emphasized that, if Israel does not relinquish its control over Jerusalem and recognize the right of Arab refugees to return, there will be no peace.

To drive home the point, beginning in March 2000, the Palestinian Authority organized bus tours for Arab refugee camp residents to view the homes and neighborhoods that they left in 1948. Using Israeli Arab buses to circumvent Israeli security, Yediot Aharonot reported on Israel Indepen-dence Day 2000 that the Palestinian Authority organized 10,000 refugees to "see" the homes from 1948 in Ramat Gan and Tel Aviv.

To make their work more efficient for the refugees, the PLO has installed state-of-the-art computers at the PLO headquarters at the Orient House in Jerusalem to facilitate a systematic effort to locate property deeds for 1948 homes that are still in the hands of Arab refugees, so that the refugee camp residents can "repossess" their property in Jerusalem – by force, if necessary.

For example, the PLO has located the owners of deeds from what before 1948 was the Arab village of Sheich Mu-wannis, which is now the campus of Tel Aviv University. As of June 2000, Sheich Muwannis and other Arab villages that disappeared in 1948 now appear on the official PLO map of the "new Palestinian state" sold at the Orient House for 15 shekels. That map obliterates the State of Israel.

Meanwhile, on 5 August 1999, and on 29 March 2000, a senior official of IDF intelligence conducted briefings for the foreign press at Beit Agron International Press Center, in which he warned that Arafat and the Palestin-ian Authority have prepared their people for war against Israel, if Israel does not accede to their demands.

It would be an understatement to say that Israel cannot accede to these "minimal" demands of the PLO.

In other words, the final status of a forward-thinking Oslo peace process has deteriorated into a potential military altercation.

In the Middle East, the development of "trust" in the short run does not necessarily translate into peace between peoples in the long run. •