Three months after the Annapolis conference and a commitment that an agreement would be reached by the end of 2008, prospects for peace are as distant as ever. Hardly a day goes by without rockets hitting Israel from Gaza. Ashkelon and Ashdod are now in range and sooner or later Tel Aviv and its environs will be hit by rockets as well, from the West Bank. Repeated attempts to do so have been thwarted by the IDF, but the law of averages is against us.

Rather than progress to peace, the rocket attacks will soon force Israel to launch a major operation into Gaza, which will further weaken PA President Mahmoud Abbas. Not that an IDF offensive can achieve an permanent improvement in the security situation, it will not, but public outrage will force the government to act.

Rather than a post-Annapolis breakthrough, it is at least as likely that Hamas will gain de-facto control of the West Bank, as well as Gaza, and that Abu Mazen will lose whatever residual authority he retains. The failure of the Annapolis process will hasten Abbas's demise.

Having successfully stonewalled the Winograd report, Prime Minister Ehud Olmert would now clearly like to make progress on the Palestinian front, but with the Palestinians congenitally incapable of putting their house in order, even a strong Israeli government would be hard pressed to do so. This government has so far proven incapable of even far more circumscribed measures.

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The phased Annapolis approach is highly unlikely to produce any progress and the sides are largely going through the motions, running the clock out on the Bush administration.

One way to reshuffle the deck and break out of the ongoing impasse, would be an Israeli proposal to start the process of resettling the Palestinian refugees now - without waiting for a final settlement - in Gaza and areas of the West Bank, east of the security fence, which it clearly does not intend to retain in a final settlement.

BY TAKING the initiative in resolving this ultimate issue, Israel would provide the peace process with a vital boost. It would cede a negotiating card, but would gain international approbation and deny the Palestinians their primary grievance. To allay genuine security and other concerns, implementation of the plan would be graduated and made contingent on a major decrease in terror. It would thereby provide the Palestinians with a concrete incentive to finally do so and would be buttressed by a careful, if not hermetic, screening process.

Most of the Israeli public understands that addressing Palestinian aspirations, first and foremost the refugee issue, is vital to solving Israel's national security problems. While total negation of a "right of return" to Israel itself is the sole issue that continues to unite the entire Israeli political spectrum, most support a return of refugees to a future Palestine.

The Palestinians, who have historically taken an all or nothing approach, rejecting every proposal for a partial resolution of the conflict, can be counted on to find reason to shout foul here, too, to denounce Israel's nefarious intentions and demand a full "right of return." As was the case with their initial opposition to Israel's unilateral withdrawal from Gaza, however, they would ultimately be hard pressed to reject such a dramatic move.

TO OVERCOME Palestinian skepticism, Israel would commit to a timetable for resettlement and a true settlement freeze in those areas to be resettled, contingent on Palestinian security measures. If packaged as Israeli concessions to Abu Mazen, this proposal would constitute an historic step that even Hamas would have trouble denying and, unlike the ill-fated measures now under discussion, would dramatically demonstrate the efficacy of the negotiated path Abbas represents.

The boost to his popularity might provide Abbas with the wherewithal to trump Hamas and with the stature needed to go forward toward a settlement. In the absence of some dramatic move, his demise seems to be just a matter of time. As the first Palestinian leader to appear to truly be committed to a negotiated settlement - and probably the last for many years to come - strengthening Abbas is a vital Israeli interest.

So we can continue with the Annapolis process and pretend an agreement is in the offing. It is not.

Or, we can try to spur it on with a new approach.