So there's a stalemate in the peace process, so what else is new? Actually, there is something new. What's new is that the Palestinians in the West Bank are doing what we've dreamed the Palestinians would do for more than a century - and we refuse to see it.

They've effectively stopped terrorism. They're building up their economy. They're enforcing the law. They're being trained by the Americans and they're cooperating with Israeli military and intelligence. They're arresting Islamic militants by the thousands, and they're not hesitating to shoot it out with them.

This hasn't been going on for a week or a month, either; it's been going on for over two years. Not only is it safe again to ride a bus in Israel, but for the first time since the mid-1980s, it's safe to drive a car through the West Bank.

This is what Khaled Abu Toameh, The Jerusalem Post's Palestinian affairs reporter, told me: "An Israeli's chance of getting killed in a car accident in Israel is now higher than his chance of getting killed by a terrorist in the West Bank."

NATURALLY, ISRAELIS haven't noticed any of this. Just the opposite - our fear and loathing of Palestinians, of Arabs, of anybody in the world who doesn't also fear and loathe Arabs, just keeps growing. We've gotten to the point where Binyamin Netanyahu stands well over on the left wing of our government, in which our foreign minister is a closet Kahanist.

In the West Bank, meanwhile, the Palestinian leadership has gone in the opposite direction. They've seen the light. After the mufti of Jerusalem, then Ahmed Shukairy, then Yasser Arafat, the leader of the Palestinians is Mahmoud Abbas, a man who was essentially handpicked for the job by George W. Bush, who is still known here as "the greatest friend Israel ever had in the White House."

Why did Bush raise up Abbas? Because he was the only senior Palestinian figure who dared to speak out against intifada terrorism and Arafat's leadership.

And who is Abbas's powerful number two? Salaam Fayad, an economist who made his career in the US Federal Reserve, International Monetary Fund and World Bank. He could have been prime minister of the Palestinian Authority earlier, but Hamas leaders wouldn't accept his condition that they recognize Israel, so he had to wait until Hamas was out of the West Bank picture.

Fayad was favored by the Bush crowd even more than Abbas, possibly because he got his MBA and PhD degrees at universities in the great state of Texas.

These are the people whom Israel ignores. These are the Palestinian leaders whom Israel persists in considering hopeless, intransigent, utterly undeserving of trust.

Meanwhile, even Roni Daniel, the gloom-and-doom military affairs reporter for Channel 2, has been talking about the "new atmosphere" in the West Bank - the safety, the commerce, the sense of freedom that's come with the IDF's removal of so many checkpoints and barriers - a policy that began under pressure from Bush.

"About the only checkpoints you come across now are the ones that stop Israelis from going into Jericho," Daniel said on last Friday night's news.

SO WHAT happened to the consensus wisdom that whenever the IDF removes checkpoints, there's an immediate upsurge in terror? This may have been true once, but it's not anymore. But have we noticed? Have we removed even one of the countless checkpoints in our minds to let just a bit of new information pass through?

No, sir. The only news we've noticed from the West Bank is what some retiree or other said at the Fatah convention.

Now that's important. That's worth about 800 op-eds. The Fatah convention, the article in that Swedish newspaper, Barack Obama's middle name - that's what we think about around here. Don't try to confuse us with this "new atmosphere" stuff. Don't try to weaken us.

This is the 21st century Israeli mentality. We don't see or hear anything about Arabs unless it's something bad.

News of hostility - from Arabs, from Europeans, from US President Hussein, from somebody, somewhere - is the only news that'll lift our morale anymore.

It's a real pity. I don't know how long this new era in the West Bank is going to last if we remain interested only in how much concrete we can pour over there, but it's not going to last forever. I don't know what's coming afterward - a return to terrorism, another Hamas takeover, a demand for citizenship in Israel - but whatever it is, the next evolution in the West Bank will be much less amenable to us than this one.

If we don't offer those Palestinians independence soon, they will turn hostile again.

The sad thing is that if they do, it'll only boost Israeli morale. It'll unify us, mobilize us, get our juices flowing.

There's nothing as good as vindication. Nothing feels better than saying, "I told you so."