Senator George Mitchell told an overflow crowd at the University of Maine Hutchinson Center in Belfast on Tuesday morning that the Middle East peace process, which he spent two and a half years shepherding as the U.S. special envoy to the Middle East, is not dead and that it is crucial to continue the effort towards a two-state solution.

"Right now, it's not optimistic, but in the middle term there can be progress," he said. "Israel is a very successful state, but they don't have security. Palestinians have no state and want one for their people. They should both be vested in the other achieving their objective because it is the only way they will reach their own."

Mitchell served in the U.S. Senate from 1980 to 1995, with the last six years as majority leader in the Senate. Success in brokering a peace agreement in Northern Ireland followed. In 2000 he went on a Palestinian-Israeli fact-finding mission at the behest of President Clinton. In the 2001 report he wrote about the effort, Mitchell concluded that to move forward Israel must halt settlement building and the Palestinians must make a commitment to stopping violence against Israel.

At his talk in Belfast, Mitchell did not see those as preconditions for negotiations to resume, but as key talking points that must be worked on before any substantive progress towards a peaceful solution is possible.

Americans have a stake in Middle East peace

Americans have an economic and ideological stake in the Israelis and Palestinians achieving a lasting peace, said Mitchell.

"We have a strong commitment to be involved in the region, in part out of self-interest," he said. "The known reserves of oil and natural gas are there and they are essential to our economy. Conflict could cause major disruption with devastating effects on our economy and on other economies. It is in our interest to maintain a degree of stability."

"Second, we believe in democratic ideals, the right to self-governance and to promote that," said Mitchell, noting that American policy after World War II was to invest in and promote democracy in Germany and Japan, which has led to stable democracies in Europe and in the Pacific.

"And we have benefitted. The EU is our second largest trading partner," said Mitchell.

"Third, the U.S. is committed to Israel historically."

In 1947, Jewish refugees from the Holocaust were being held in refugee camps across Europe and in Cyprus. Many could not return to their homes, either because they no longer existed or because pogroms against Jews continued. Immigration to the U.S. and elsewhere was limited or closed. It was under these circumstances that President Harry Truman supported the 1948 United Nations Partition Plan to carve Palestine into two parts to create an Arab state and a Jewish state. The U.N. partition plan called for an independent Palestine, with 45 percent of the territory of Jerusalem, the most disputed territory, going to the Arabs.

Israel accepted. The Arabs did not. Jews had come home to their historic homeland, but Palestinians had been invaded and were disinclined to negotiate. Recent negotiations have focused on the 1967 boundaries that would also include land swaps to the Palestinians for the Israeli settlements. But talks have stalled out, with the latest move by the Palestinians to seek statehood through the U.N. - a move that is popularly supported by the Arabs but will not get American support and is, therefore, unlikely to bear fruit, according to many Middle East analysts, including Mitchell.

Three generations later, the Palestinian refugees are in no better position and their options are increasingly limited as Palestinian territory dwindles. In all the land wars, Israel has prevailed.

"Every Arab leader today would accept the 1948 lines, but that choice will never come again," said Mitchell.

Israel's future hinges on willingness to negotiate

Israel, said Mitchell, has a false sense of comfort and security because of the wall, a series of fences and walls that separate Israel from the West Bank, but soon Israel will face a demographic dilemma that will put a two-state solution out of reach.

"There are five and three quarter million Jews between the Jordan River and the Mediterranean Sea. There are five and a quarter million Arabs there who are Israeli citizens. The Arab birth rate is higher and the number of Arabs will exceed the number of Jews in the not-too-distant future. At that point Israel will face a choice between being a democratic state or a Jewish state. They cannot be both."

"The second challenge Israel faces is one of technology in warfare. Until now, there have been land wars and Israel has won them all. The major challenge now is rockets. They are a real threat to Israel."

Hamas, on the southern border, has six to eight thousand rockets that are crude, but mobile, said Mitchell. On the northern border, Hezbollah has 30,000 rockets that are being upgraded. Iran now has rockets that can be launched into Israel. While they cannot target specific locations, they can still inflict horrific damage in urban areas, he said.

A U.S. anti-missile system is in place, Mitchell said, but in an all-out conflict it would not prevent enormous destruction.

"The third challenge is the international community," he said. The peaceful Israeli-Egyptian relationship has deteriorated and the Israeli relationship with Turkey is threatened. Many at the U.N. now favor the Palestinians.

Palestinians must show flexibility

Both sides must be willing to accept less than they want in the interest of peace, said Mitchell. They have not yet reached that point.

"I personally went to 13 countries and in almost every single one I was told that Palestinians . . . should not enter into negotiations unless there was full freeze on Israeli settlement activity."

"We negotiated that and the Israeli leaders agreed to halt new housing in the West Bank for 10 months. It was much less than what we asked for but more than anyone else had done. The Palestinians rejected it as worse than useless. They were strongly opposed to it. Then nine months on, there were negotiations for a couple of weeks that were discontinued by the Palestinians on the grounds that Israel wouldn't continue the settlement freeze. What had been less than worthless a few months earlier became indispensable to continue negotiations."

The Palestinians will not get 100 percent of what they want. It is not attainable, he said. The question is: will they negotiate to get a stake in their future or continue to fight for a past that is out of reach?

"They have demonstrated the ability to build a state. They have begun to establish the institutions necessary to do that."

"The choices have become less and less over time. There is not a shred of evidence that they will get any better in the future. The pain of negotiating is less than if they don't negotiate. If both sides go on they face an extremely dangerous future."

Declining to negotiate is no option at all, said Mitchell.

"When I came back from my several years in the Middle East my wife said, "The expectations for you were zero and you met them."

"The last time I was back and met with Palestinian and Israeli leaders, I?said, You have to do something so I can go back to my wife and say: you spoke too soon."