The other day in Washington a colleague of mine asked the White House press secretary what journalists should call the Middle Eastern event that is about to happen in Annapolis. The press secretary did not offer any advice. An aide suggested "get together".

Maybe the aide was being mischievous. But words like summit or peace conference are being discouraged. Expectations for the meeting in Annapolis are being minimised.

If you want to be right about the Middle East, it usually pays to be pessimistic.

An awful lot can go wrong with any attempt to bring Israelis and Palestinians together, and often does.

The last time the United States convened a full blown Middle East summit, at Camp David in 2000, it collapsed.

The vacuum left behind was filled a few months later by violence that continues today - at a much lower level, but it never stops threatening to get worse.

Definition of success

So the United States is going for what, on the face of it, looks like an unambitious definition of success at Annapolis.

It will be satisfied if the conference does not end in an argument, and if it can kick-start a new series of meetings between Israel and the Palestinians that will start trying to tackle the biggest differences they have between them, the so-called "final status issues".

  Israelis and Palestinians are going to have to be honest about the price of peace. The last time they had a peace process, neither side really spelt out which dreams would have to die to make it work

They include the futures of Jerusalem, Jewish settlements and Palestinian refugees, as well as borders, security and relations with their neighbours.

So forget about the attempts to play down what is being attempted at Annapolis. What they are doing is very ambitious indeed.

US Secretary of State Condoleezza Rice is trying to use the last year in office of the Bush administration to create a Palestinian state and in the process take a giant leap towards settling a conflict that started around a century ago.

The road ahead is full of boulders and traps. But just because the peace process that they hope to start at Annapolis could collapse, it is still an opportunity for anyone who believes that the only way to stop more generations of bloodshed is to set up a Palestinian state alongside Israel.

Satisfying both sides

The result has to be a country called Palestine that makes its citizens feel they have justice and freedom, and which makes its neighbours in Israel feel secure.

It is simple enough to write that in a sentence, but much harder to make it work in practice.

The reason is that people on both sides feel that if their enemy wins, they have to lose.

These days every side talks about the need for a Palestinian state. The question is what kind of state.

If it is not sovereign, territorially contiguous and economically and politically viable there will no peace for Israelis or Palestinians. Here are some of the things that will have to happen if this process is to succeed.

  OBSTACLES TO PEACE

Israel would have to leave most of the land it has occupied in the West Bank since the 1967 Middle East war.

That will mean moving Jewish settlers. It will also have to make substantial concessions in Jerusalem, allowing Palestinian sovereignty not just over the refugee camps and Arab suburbs in the north-east of the city, but also in the places that make Jerusalem special, right at it heart in the Muslim and Christian holy places in the walled Old City.

Parliamentarians in Israel have already introduced a bill aimed at stopping this happening.

The Palestinian Authority led by Mahmoud Abbas and Prime Minister Salam Fayyad is going to have to work hard to create institutions of state that are strong enough to deliver the security the Israelis need.

They will need help and money from abroad, which they are starting to get, as well as the co-operation of the Israeli army.

Price of peace

The only way that Palestinians will get behind an Annapolis peace process - and whatever Messrs Abbas and Fayyad tell them, most of the people I talk to are very sceptical - will be if Israel makes it easier for them to move freely around the West Bank, and stops expropriating their land for Jewish settlements.

Both Israelis and Palestinians are also going to have to be honest with their own people about the price of peace.

The last time they had a peace process, in the 1990s, neither side really spelt out which dreams would have to die to make it work.

  This attempt to make peace should be taken seriously, because the Americans are behind negotiations for the first time in seven years

Palestinians are going to accept that the vast majority of the refugees who lost their homes when Israel was created in 1948 are not going to get them back.

What they will need to give up their dream of return is money and the right to settle in a new Palestine. They will also want an apology, which Israel will be reluctant to give.

The settlement of Jews in the West Bank has been a 40-year project.

The idea was that the settlements would improve Israel's security, build the nation in places where Jews had lived since biblical times, and make it impossible to give the land back to the control of Arabs.

Israelis who believe that the entire land between the Dead Sea, the river Jordan and the Mediterranean is Jewish land, vital to their security and given by God, are going to have to give up their dreams too.

Making a success of Annapolis, and the negotiations that are supposed to follow it is going to be fiendishly difficult.

Both sides will have to make massive, historic and deeply painful concessions, probably by the end of next year. Even if they are willing and able to pay the price of peace - which is not certain - lots can go wrong.

Absence of Hamas

A big weakness is that Hamas, the Palestinian faction which seized control of Gaza from President Abbas's Fatah in June, is not included in the process, and could still have the capacity to wreck it.

How will Israel react if Hamas sends suicide bombers to Tel Aviv, or steps up the rocketing of the Israeli border town of Sderot? It will help if Syria, the ally of Hamas, is brought on side, with the prospect of negotiations over the Golan Heights, also captured by Israel in 1967.

  So the stakes are very high... But it is worth trying, because the alternatives are worse

Israeli Prime Minister Ehud Olmert will face a political firestorm if he tries to do give up land and settlements in the West Bank and Jerusalem. Yitzhak Rabin, prime minister in 1995, was assassinated by a Jewish extremist who wanted to stop him giving up the West Bank.

And then there's the rest of the Middle East, which is smouldering. What would happen to negotiations between Israel and the Palestinians if Lebanon slips into civil conflict? What would happen if the Americans bombed Iran?

But this attempt to make peace should be taken seriously, because the Americans are behind negotiations for the first time in seven years. They are going to have to stay engaged. When the talks get stuck, or break down, they must provide fresh ideas and impetus, and they are going to have exert pressure on Israel as well the Palestinians.

The incentive for the Palestinians is that this could be the last chance for the secular nationalists of the PLO to create a state.

The incentive for the Israelis is that if this fails, the vacuum that would be left could be filled with violence, as it was after the collapse of Camp David in 2000. And next time it might be different in degree.

The tides of jihadi extremism that are flowing out of Iraq, Afghanistan, and elsewhere, which have already reached parts of Lebanon, Jordan, Egypt and Gaza, could end up even closer to them.

So the stakes are very high. This attempt may not work. The list of what needs to go right might just be too long, and negotiations in the run-up to the Annapolis conference were very difficult. But it is worth trying, because the alternatives are worse.