As the Bush administration nears the end of its term, two things are becoming obvious. First, the original objective of the Annapolis process–a peace deal by the end of 2008–is unlikely to materialize. Redefining the process both in terms of approach and public expectations has become necessary. Second, with the inability to achieve a breakthrough, there is a real risk that, the Annapolis process may not be able to withstand the loss of U.S. leadership while the United States is looking inwards during the transition period.

The objective of U.S. diplomacy on the Israeli-Palestinian track for the remainder of the Bush term should shift. While continuing to pursue a peace deal, it must simultaneously ensure that the fragile peace process is strengthened to secure its transition to the next administration.

Since its launch, the Annapolis process has depended on U.S. leadership. While committed to the peace process, President Abbas’ and Prime Minister Olmert’s ability to lead has been hampered by their respective domestic political problems. The Bush administration, particularly Secretary Rice, has consistently–though not always effectively–taken the lead and tried to ensure progress in the negotiations.

A loss of U.S. leadership during the transition could lead to a collapse that triggers domestic crises on both sides. Among the Palestinians, President Abbas and his camp would be left with nothing to show for their efforts towards achieving statehood. This failure would significantly, and even irreparably, weaken their position vis-�-vis Hamas. In Israel, such a collapse would come in the midst of an already complex political environment and would likely help usher in a right-wing victory. In such a scenario, getting the peace process back on track would require tremendous effort and energy. If this is the inheritance the next president receives, he will have far less ability to engage in peacemaking early on in his presidency.

Therefore, a transition package is necessary. A successful package will need to address three bundles of issues: permanent status, land and security, and confidence-building measures.

On permanent status issues, good progress has been made in bilateral Palestinian-Israeli negotiations. However, the two sides have been unable to bring these to conclusion primarily for political, rather than substantive, reasons. Pushing too hard for a breakthrough–whether negotiated bilaterally or in the form of U.S.-sponsored ideas–could result in the breakdown of the fragile process.

Instead, a formula should be found for preserving and recording progress made. This is not without risk. The two sides cannot create such a document in bilateral negotiations. Previous attempts to do so in 1999-2000 all failed as each side immediately set out to reinterpret its own concessions in the most conservative light, while affording the other side’s concessions the most liberal interpretations. The tendency to do this would be exacerbated if the sides believe that the resulting document would leak. Accordingly, the result of a bilateral recording effort would be a setback and could reverse most of the progress.

Instead, a recording effort should be undertaken by the United States, which should consult with, but be willing to overrule, the two sides. This strategy would have the advantage of minimizing posturing during the drafting of the document and providing a degree of deniability in case of a leak. A document of this nature would help the next administration to re-energize negotiations once it is ready to engage.

However, the very prerequisite for the success of a recording effort–namely secrecy–means that such a document would have limited if any impact on public confidence in the Annapolis process. Instead, maintaining the credibility of the process would require tangible, visible progress on other fronts. There are two categories of tangibles that need to be part of a transition package: the first is settlements and security, and the second is confidence-building measures (CBMs).

Settlement expansion and security are singularly important in that they touch the very core of what Palestinians and Israelis want from the peace process. Inaction on those fronts is credited with the erosion of the Oslo process. It will be hard for a Palestinian leader to justify continuing with a peace process while settlements continue to consume Palestinian land. Similarly, it would be difficult for Israeli leaders to continue the process if there were no visible efforts to build the capacity and effectiveness of Palestinian security services, both in terms of law and order and counter-terrorism. Fortunately, there is an emerging receptivity among the players. The Palestinians are already engaged in a U.S.-assisted security sector reform process as a result of the growing realization that security is primarily a Palestinian interest. Similarly, though perhaps on a smaller scale, the realization of the problems caused by settlements is finding its way into the Israeli establishment.

Progress on these issues requires an active U.S. role. These issues have repeatedly shown that, if left to bilateral negotiations, they can be interminable. Instead, these issues should be advanced on parallel tracks between the United States and each of the parties separately. In terms of Palestinian Authority security capacity, the Palestinians and Americans should build on the ongoing achievements of General Keith Dayton. The United States should start a similar, highly intensive effort to establish a settlement freeze with Israel. A settlement freeze and improved Palestinian security performance can go a long way in creating a robust peace process.

Besides security and settlements, a myriad of CBMs such as prisoner releases, opening up Palestinian institutions in Jerusalem and incitement present themselves. Unlike settlements and security, these issues do not go to the core interest of both sides. Instead they affect the “feel good” factor. As such, they should be approached in the most utilitarian way. Those which are of high political cost to either side should be set aside, and those with minimal cost and maximal impact should be pursued. CBMs should not be a subject of protracted negotiations, lest these negotiations themselves erode trust. In addition to bilateral CBMs, efforts to improve the Palestinian economy would help create confidence.

Developing a package of this sort is still feasible before the end of the year. It does require, however, a shifting of gears by the administration. Rather than continuing to pump most of its political capital into trying to reach a final peace agreement, the administration should direct its efforts toward building a stabilization package. This shift of focus must be accompanied by a shift in methods. Heightened U.S. engagement would require deploying diplomatic resources capable of developing and putting in place such a complex multi-faceted package. While Secretary Rice would remain the focal point, a more extensive and coherent diplomatic architecture that manages the process on a day-to-day basis would be necessary.

Such a package could see the Annapolis process through the transition period and could set the stage for a renewed U.S. role. Absent that, the end of the Bush administration could also signal the end of the peace process in the foreseeable future, and possibly longer than that.