Until recently, one or more players in the Arab-Israeli conflict rejected United Nations Resolution 242 for one reason or the other. By the time the Palestine Liberation Organization (PLO) accepted 242 in December 1988, the Israeli government under Yitzhak Shamir rejected any further territorial concessions. The election of Yitzhak Rabin in Israel last June finally restored, after 25 years, Resolution 242 as the main instrument of reference for all future Arab-Israeli negotiations. Even though many aspects are ambiguous, Resolution 242 established the principles on which an Arab-Israeli peace can be erected.

As the Israeli and Palestinian representatives meet this month for another round of negotiations, they should take a much harder look at their people's inter-disbursement on the ground and examine how future demographic developments might affect their relations. This analysis will clearly indicate that only coexistence under separate political authority offers hope for a solution. Here is why:

As Israel this month celebrates the 25th anniversary of a united Jerusalem, the Bush administration should look anew at the Jerusalem "experiment" and its impact on Israeli-Palestinian relations, and utilize it as a catalyst for a breakthrough in the peace negotiations.

Israel should withdraw its request for $10 billion in loan guarantees and resort to other sources to finance the absorption of Soviet Jews. At stake is the United States-Israel special relationship – which could be irreparably damaged as a result of misguided policies in Washington and Jerusalem.

Israel's announced expulsion of 12 Palestinians accused of inciting riots and violence in the occupied territories raises legal, moral, and political questions. What law could conceivably justify the expulsion of a person from his homeland? True, the Shamir government is under severe pressure to placate settlers in the territories who demand stern measures against the Palestinians for the stabbing or shooting of settlers.

Following Israel and Syria's rejection of President Bush's compromise proposal to convene a regional peace conference, a reassessment of the U.S. Middle East strategy and role is critical at this juncture. To break the impasse, the U.S. must develop not only a new stategy but advance a dramatic and comprehensive peace plan of its own that meets the minimum national requirements of the conflicting parties.

A head-on collision between the United States and Israel is inevitable unless the two governments take a hard look at the source of the problem and adopt the necessary measures to restore the cooperative and trusting relationship vital to their national interests.

A basic lack of understanding exists between the Bush administration and the Shamir government regarding the provision in United Nations Resolution 242 requiring the "withdrawal of Israeli armed forces from territories" in exchange for "peace within secure and recognized boundaries." President Bush believes that the resolution requires Israel to surrender territories captured in the 1967 war on all fronts. The Shamir government rejects this on the grounds it would undermine Israel's security and usurp its historic right to settle Jews on their ancient homeland.

Unlike past US-Israeli discords which were readily patched up, there is a crisis of confidence brewing between the Bush administration and the Shamir government over Israel's request for a $10 billion loan guarantee. Ironically, the discord between the two governments has less to do with the loan itself than with what it represents.