After watching President Bush earnestly deliver his benediction to the Annapolis peace conference, a caustic English friend likened the scene to one of the durbars held periodically to bolster the British Empire's rule in India. As with the long-ago gatherings of maharajahs, wrote my friend, "so the U.S. has convened its vassals from around the world to witness -- mostly in silence -- a grand event, the import of which is closed to them."

A note of skepticism is always warranted on the topic of U.S.-Arab-Israeli peacemaking. And in the run-up to Annapolis, expectations were so low they were sinking into the Chesapeake Bay.

But in this case, I take the contrarian view: Something real did happen in Annapolis. The process that began Tuesday may not lead to peace, but that doesn't mean that Annapolis was simply a gaudy, empty show. A careful reading of the "Joint Understanding" that was announced by Bush reveals the achievements and the failures. I find several important steps forward:

For starters, the document commits the parties to begin negotiations on a peace treaty "resolving all outstanding issues, including all core issues without exception." The text unfortunately doesn't specify what these unmentionables are, but negotiators understand that it does mean the two deal-breakers: Jerusalem and the right of return of Palestinian refugees. The prayers of Israelis that they wouldn't have to talk about Jerusalem, and of Palestinians that they wouldn't have to discuss the right of return, have not been answered.

The most contentious passage was the last paragraph, which concluded that "implementation of the future peace treaty will be subject to the implementation of the road map, as judged by the United States." The Israelis won an important concession here, in the understanding that a treaty won't happen unless there is security on the ground, as the road map mandates. But they gave up something important, too, in specifying that America will decide whether the road map conditions are being met.

This role of arbiter puts Secretary of State Condoleezza Rice squarely in the middle of the process as the proverbial "honest broker." And it gives the United States considerable leverage to prod the two sides.

Second, it matters that all sides have agreed to "vigorous, ongoing and continuous negotiations" through 2008. This alters the agenda for the region, in a positive way. A peace process has begun, and all the powers in the region -- including Iran, Syria, Hezbollah and Hamas -- will have to deal with it. The radicals will try to blow it up, but if any progress is being made, that will be difficult. The process will become credible if the road map conditions improve next year -- if Arabs see Israelis dismantle settlements and if Israelis see Palestinian security forces establishing order and curtailing terrorism. If the two sides fail to take these crucial confidence-building steps and cede ground back to the extremists, it will be their fault.

The very words "peace process" have a narcotic effect, and that's not all bad. They are the diplomatic equivalent of creating facts on the ground. They become the focus of attention. They distract from other problems. In a Middle East that is already far too volatile, this tranquilizing aspect of the Annapolis process is useful -- and shouldn't be squandered.

Third, it's important that the Saudis, Syrians and other Arab League members were present at the conference as prospective midwives. That was Rice's goal when she began thinking about the Annapolis process -- to get "buy-in" from the Arabs at the outset so that Palestinian President Mahmoud Abbas would have some cover. The Arab presence also gives Israelis a hint of what full Arab recognition would feel like.

The Saudis came because they are worried about the rise of Iran and the radicals. But it would be a mistake to see Annapolis simply as a pretext for a new anti-Iranian front. "There is a feeling that all of us are exhausted by this," one Saudi explained. "To have stability in the Middle East, the Palestinian issue must be resolved."

The Syrians came because Annapolis explicitly signaled that their issues are on the table, too. The schedule of yesterday's events specifically mentioned "Israel-Syria" and "Future Separate Tracks Between Israel and Neighbors." Some leading Israeli politicians, including Defense Minister Ehud Barak, would like to start negotiations with Syria tomorrow. Damascus, by its presence in Annapolis, showed that it may be ready to play.

Sometimes, the things that matter are the ones right in front of your nose, and that's the case with Annapolis. Critics talked for months about how the conference wouldn't happen and wouldn't matter anyway. Well, it did, and it does. A peace process, with all its ambiguity and occasional sophistry, is underway.