Like so many Palestinians of his generation, Sari Nusseibeh looks back at years of struggle that have achieved precious little. His entire adult life has been spent in the shadow of conflict with Israel and it is difficult to find even a glimmer of optimism that it is going to be resolved any time soon.

Yet Nusseibeh, a prominent intellectual and philosopher, believes it could be. Mahmoud Abbas, the Palestinian president, and Ehud Olmert, Israel's prime minister, should, he argues, launch a new peace process at the forthcoming Annapolis conference - and then campaign among their respective electorates for a mandate to negotiate a final peace settlement.

An appropriate response to this might be "bukra fil mish-mish" - a colloquial Arabic phrase that roughly translates as "pigs might fly".

It is easy to demolish his rosy scenario: each leader may fail to deliver; each risks being hobbled by opponents on his own side. Olmert has to win over hawks opposed to evacuating settlements and dividing Jerusalem. Abbas's enemies in the Islamist movement Hamas, now running Gaza, accuse him of selling out to the Zionists. And any progress could be nipped in the bud by a Palestinian suicide bombing or Israeli air strike.

All true, Nusseibeh agrees mildly. But, he insists in an interview, success is still possible.

"If you think about it, when we talk about politics and history and how events unfold, sometimes we talk as if it's all about metaphysical forces. We assume, like in this case, that there are objective impossibilities. I am a pragmatic philosopher. And when you look a bit more closely you realise that in the final analysis it's not so complicated. It can be reduced to the actions of a person, and that person can in fact make a lot of difference."

Nusseibeh is soft-spoken, tweedy and academic. But the professorial style is misleading: conversations about Kant provided him with cover from Israeli eavesdropping when he was involved in the first intifada (uprising), producing the clandestine leaflets that shook the occupation to its core.

He may never have fired a shot or thrown a stone in anger, yet his ideas are a powerful antidote to fatalism and the (increasingly widespread) argument that after 40 years Israel's control over the West Bank, its Palestinians caged into disconnected bantustans, is now an irreversible reality.

"Things could work out if people put their minds to it," he says. "My faith is in the power of people to write history. One of the tragedies is that we very often sit back feeling that we have no power and that all we can do is express is our optimism or pessimism."

Nusseibeh is no Palestinian everyman. Born into the privilege and wealth of one of Jerusalem's oldest Muslim families, he studied at Oxford before teaching at Bir Zeit University.

With an English wife and a fancy foreign education, he cut an exotic figure in other ways. Having grown up literally on the post-1948 front line - when the Jordanian and Israeli parts of the city were divided by minefields and barbed wire - he ventured across them, curious to explore the new reality.

When most Palestinians were reeling from their stunning defeat, he worked on a kibbutz in Israel and discovered that the enemy had a human face.

"Until 1967," he writes in his memoirs Once Upon a Country, published in Britain this week, "we had hardly existed in the minds of these fine people. This absence wasn't a product of malevolence or ill will. Physically, we simply weren't part of their world, with most Arabs having been cleared out 20 years earlier. Morally speaking, it was a case of out of sight, out of mind. Their humanism never had to face us."

Unusually for any Arab or Muslim, Nusseibeh recognised that Jews had emotional claims on the holy land (their roots in Jerusalem "existential and umbilical"), and refused to see Zionism as just another facet of western colonialism, or to ignore the role of the Nazi Holocaust in forging Jewish nationalism.

"Isn't the ability to imagine the lives of the 'other' at the heart of the Israeli-Palestinian conflict?" he asks.

Even so, there were limits to empathy: he taught at the Hebrew University in Israeli west Jerusalem before the grim and sometimes brutal reality of living under military rule - facing a young soldier at a roadblock who might have been one of his own students - forced him to retreat.

In his Bir Zeit lecture hall he realised early on that Islamist students were hostile to the dawning understanding among Palestinians (many of them "graduates" of Israeli prisons) that there had to be two-state solution to the conflict.

The Israelis, though, foolishly encouraged the groups who were to become Hamas as a counterweight to the secular nationalists of Yasser Arafat's Fatah and the rest of the PLO.

Nusseibeh's book is fascinating on the relationship between West Bankers and the PLO leadership in exile, describing the peremptory Armani-suited apparatchik who tried to control grassroots activism on the campus.

Even when becoming the organisation's representative for Jerusalem, harassed by Israeli agents and doing time in prison (accused, absurdly, of spying for Iraq) he remained semi-detached - an intellectual uncomfortable with the intrigue and short-term thinking of "professional" politicians.

Over the years Nusseibeh's independence and his advocacy of co-existence and dialogue attracted suspicion, hostility and death threats - though none intimidating enough to crush his sense of duty to speak out.

Now back on campus as president of Jerusalem's al-Quds university, he is openly critical of Fatah for provoking this summer's Hamas coup in Gaza.

But there is, he suggests, still an argument to win, if Abbas can make a case for light at the end of the negotiating tunnel.

"The thing is not to try to change their ideology, but to win the people over to one's own side. The relevant issue is not whether the ideology exists but how much support it has."

In 2002, at the height of the second intifada, with its bus bombings, martyrs and Israeli re-conquest of the West Bank ("a catastrophic, slapdash brawl ... a ruinous and sanguinary fit of madness") Nusseibeh teamed up with Ami Ayalon, the dovish former head of Israel's Shin Bet secret service, to try to galvanize the majority of people on both sides who say they want to live in "two states for two nations" - but doubt whether it can ever be achieved.

Nusseibeh's faith and determination that it can be rings through. And if this is the triumph of hope over bitter experience it is still inspiring to hear it.

"In retrospect people will feel it was stupid to spend so much time over dividing this piece of land," he muses. "I'm not saying it's easy to reach a mathematical solution, but such a solution does still exist. I'm not saying that it's guaranteed. It's a question of deciding in which direction to walk."