IT'S BEEN one month since Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas met in Annapolis to launch the first Middle East peace negotiations in seven years. When they meet again today, they will have cause to reflect on how much can go wrong when the world's most notoriously difficult "peace process" is taken over by official negotiators, government bureaucrats and military commanders. Far from beginning to hammer out the two-state settlement that Mr. Olmert and Mr. Abbas committed themselves to, Israeli and Palestinian officials have managed to create a somewhat artificial "crisis" that the two leaders must try to untangle.

The trouble began within days of the Annapolis meeting, when Israel's Housing Ministry made the first of a series of gratuitous and provocative announcements about construction in Jewish settlements beyond Israel's internationally recognized border. The most tangible of these was a tender for the construction of 307 homes in Har Homa, a controversial Jerusalem neighborhood that is wedged between Palestinian areas of Jerusalem and the West Bank town of Bethlehem. Palestinian negotiators -- several of whom were closer to former president Yasser Arafat than they are to Mr. Abbas -- seized on the action as a violation of Mr. Olmert's commitment to "immediately" implement the first phase of a 2003 U.S.-sponsored "road map" that calls for a freeze on all settlement construction.

Israeli ministers, including a couple who oppose the peace talks, rushed to tour Har Homa and to make the point that, in Israel's view, it is part of Jerusalem and thus not subject to the building restriction. The European Union, the United Nations and, somewhat surprisingly, Secretary of State Condoleezza Rice criticized the Housing Ministry action. When Egypt joined the chorus, Israel's defense minister said the real problem was not settlement-building but Cairo's allowance of massive weapons-smuggling to the Hamas-controlled Gaza Strip. A low-grade war between the Israeli army and Palestinian militants in Gaza has escalated in the past month, putting further pressure on the talks.

The most hopeful aspect of the new peace process has been the recognition by Mr. Olmert and Mr. Abbas in their private meetings, and occasionally in their public statements, that issues such as the construction in Har Homa are marginal to a two-state settlement. Both recognize that Israel will annex small parts of Jerusalem and the West Bank that are heavily populated by Jews, probably as part of territorial swaps. The "crisis" they are facing is not one of Israeli settlement expansion but of their own failure to impose their priorities on the bureaucracies and competing politicians around them. If the Annapolis process is to survive, Mr. Olmert and Mr. Abbas -- perhaps with an assist from President Bush, when he visits the Middle East next month -- will need to begin asserting themselves.