President Bush is due in the Middle East on Wednesday to try to rekindle hope for a lasting peace, but first he'll have to win over skeptics such as Ghazi Bustami.

"For seven years, Bush served Israel and made war," says Bustami, 31, the portly, soft-spoken Palestinian owner of a TV repair shop in this West Bank city. "Now with a few months left in his presidency he thinks of the Palestinians. But it's too late."

People on both sides of the Israeli-Palestinian divide doubt whether a president best known for the Iraq war has the credibility to help deliver perhaps the world's most elusive peace deal. There is some optimism in places such as Nablus — where improved security has bolstered hopes for a Palestinian state — but disagreements endure on other key obstacles to peace, and even Bush's advisers are playing down expectations for a breakthrough deal anytime soon.

Instead, Bush's first trip as president to Israel and the Palestinian territories seeks to improve relations with the Arab world and show he is committed to a long-term solution for a conflict that remains a major rallying cry for Islamic extremists. The trip also raises a more enduring question: whether the United States can still be an effective peace broker despite events that have deteriorated its popularity in the region, such as the Iraq war and the Abu Ghraib prison scandal that involved the mistreatment of Iraqi captives.

"I'm afraid Bush's trip is just a photo op," says Yonatan Touval, a foreign policy adviser in Israel's dovish, left-wing Meretz Party, who is skeptical that Bush will "actually put himself on the line and put his weight behind" negotiations.

Bush has refrained from trying to broker a major Middle East peace agreement so far in his presidency, and national security adviser Stephen Hadley concedes that Bush is "not looking for headline announcements" during this trip.

It is unlikely that Bush will even get Israeli and Palestinian leaders to sit down at the same table, Hadley says, much less broach thorny issues such as where the borders will be drawn for a Palestinian state.

However, Hadley says, the timing is right for a visit. Moderate, compromising leaders are now in charge on both sides, and there is crucial backing from Arab states such as Egypt and Saudi Arabia, which attended a modestly successful peace conference Bush organized in Annapolis, Md., six weeks ago.

A visit by a U.S. president still has a unique ability to prod the leaders toward a long-term deal, Hadley says.

"Just his going there is going to advance the prospects," Hadley says.

West Bank breakthroughs

In the short term, the main hurdles to peace are Israeli housing settlements in the West Bank and attacks on Israel by Palestinian militants. If there is any sign of progress on the latter, the calm streets of Nablus could be Exhibit A.

Until a few months ago, the city of 135,000 was the Wild West of the West Bank, its streets ruled by armed militants loyal to various Palestinian militant groups such as Hamas. Today, the rattle of machine guns has been replaced with the shouts of vendors hawking their wares in the city's ancient souk. The thugs who once held sway largely have been replaced with freshly trained Palestinian police recruits in crisp uniforms.

Palestinian President Mahmoud Abbas hopes the turnaround can demonstrate to Israel and the world that his people can handle their own security, one of the biggest hurdles to Bush's long-stated goal of making a Palestinian state a reality.

Israeli troops still conduct occasional sweeps of their own to round up militants, such as a four-day operation in Nablus that ended Sunday, but Palestinian police say they have the situation in hand.

"Hamas is totally under our control," says Ahmed Sharqawi, Nablus' newly appointed, chain-smoking police chief. He said police have confiscated up to 80% of Hamas' weapons and "decimated their military capabilities in the West Bank."

The improvement in the West Bank follows a year that, nationwide, saw violence between Israelis and Palestinians fall to the lowest levels since 2000. Violence rose then after President Clinton failed in a late-term push for peace similar in some ways to Bush's.

In another possible breakthrough, Israeli Prime Minister Ehud Olmert admitted last week that Israel's continued construction of housing settlements in the West Bank was a violation of the "road map" for peace that the Bush administration outlined in 2003.

Some of the new settlements are forbidden by Israeli law, including an outpost erected near the Palestinian village of Billin on Wednesday.

The issue infuriates Palestinians who see any new construction as a sign that Israel will never cede them the territory they want for a state.

Whether Bush can turn Olmert's words into concrete action on the settlements issue will be crucial to how his trip is perceived in the Arab world, says Bruce Riedel, a senior fellow at the Brookings Institution.

Olmert's predecessor, Ariel Sharon, promised Bush he would uproot at least 20 illegal settlements but never followed through.

Bush's "sales job … is going to be very hard to pull off as long as there is new construction going on," Riedel says.

Dependence key to U.S. position

Many members of Olmert's coalition see the settlements as a bargaining chip to persuade the Palestinians to rein in militants in their ranks, and secure other concessions in later negotiations.

"The government will immediately fall" if Olmert tries to evacuate settlements without first getting concessions from the Palestinians, says Tzahi Hanegbi, the head of parliament's foreign affairs committee and a close Olmert ally.

Traditionally, U.S. presidents have had the ability to pressure Israeli leaders to compromise on such issues because of Israel's dependence on the United States for economic and military aid, says Gidi Grinstein, director of the Reut Institute, a think tank based in Tel Aviv.

"American pressure is the single most important factor for keeping coalitions together here," he says.

The last major breakthrough in the peace process, the 1993 Oslo Accords, was partly a consequence of a decision two years earlier by then-president George H.W. Bush, says David Landau, the editor of Israel's Haaretz newspaper. The elder Bush suspended some aid to Israel until it froze settlement expansion, an unprecedented step that led to the fall of the government and the election of Nobel Prize-winning peacemaker Yitzhak Rabin, Landau says.

Today, Israelis still rely on U.S. pressure to broker deals, a point Landau made in crude fashion in September when he told visiting Secretary of State Condoleezza Rice that "Israel wants to be raped by the U.S."

The comment, while crass, struck a nerve in Israel and has been repeated widely in political circles in the days prior to Bush's visit.

However, Bush's low popularity at home and around the world may leave him unable to deliver compromises on the most difficult issues, says Aaron David Miller, a former Middle East negotiator for six secretaries of State dating back to the Reagan administration.

"Right now, we are perceived to be weak," he says.

Olmert believes a deal is crucial

Without U.S. pressure, the inertia from decades of conflict may prevail.

Israelis' recent experience with withdrawal from occupied Arab lands has been largely negative. Ever since Israel pulled its army and settlers out of Gaza, militants have waged a relentless rocket campaign against nearby Jewish communities.

Israelis fear that loosening their military grip on the West Bank by removing troops, settlers and more than 500 checkpoints and roadblocks would lead to a new wave of attacks by Arab militants.

"If you take away the roadblocks, you leave us completely without any defense, and you think the cat is not going to come and gobble us up?" says Rachel Klein, the spokeswoman for Kiryat Arba, one of the oldest Jewish settlements in the West Bank.

Many Palestinians remain convinced that the Americans' interest in the conflict is one-sided.

"Things just get worse and worse," says Hossam Kataloni, an Islamic cleric-turned-Nablus city councilman from Hamas' Change and Reform Party. "The Americans will continue to give the Israelis unlimited support no matter what they do."

Nevertheless, Olmert believes a deal is vital to Israel's long-term survivability as a Jewish and democratic state, particularly because immigration and demographic trends mean that Palestinians could outnumber Israeli Jews within just a few years.

The occupation of the West Bank also is distracting Israel from more ominous threats looming beyond its borders, namely Iran, a country Israel is convinced will soon have nuclear weapons and whose leader has publicly called for the Jewish state's demise.

Analysts such as Grinstein believe the parties involved may set their sights on something less than a full-fledged peace deal.

"Instead of signing an agreement, the more likely option is that we will simply recognize the Palestinian Authority as a state by systematically transferring powers and responsibilities to them," he says.

Bush has a narrow window of opportunity to move toward peace. His term in office ends in January 2009, as does Abbas'.

If history is any indication, an incoming U.S. administration is unlikely to concern itself with the daunting task of Middle East peacemaking during its first term. Olmert has pulled through a string of recent scandals and his fragile coalition could fall apart at any moment.

Says Touval, the Israeli foreign policy adviser: "Whatever we don't finalize or complete by January 2009, we will probably not conclude for a good many years afterward."

That would mean Bush's successor would have to basically start over.

"It's hard to be optimistic," says Dror Etkes, a leading Israeli peace activist. "But I'm also aware that breakthroughs in history don't always happen when people are anticipating them."