NEWS ANALYSIS : Mideast Peace: Time to Close the Books? : Negotiations: Some foresee failure. But others say tackling the toughest, final issues now will work.

JERUSALEM —  Middle East peacemaking, so energetic and promising a year and a half ago when Israel and the PLO agreed on Palestinian self-government, appears to have stalled, and with that loss of momentum have come fears that this effort, like so many before, will collapse in failure.

Israel has yet to pull its troops out of West Bank towns and villages, as it pledged in the agreement with the Palestine Liberation Organization, and the Palestinian Authority thus has not been able to hold the elections that would extend its rule and give it political legitimacy among skeptical Palestinians.

Muslim radicals opposed to the accord have spread a campaign of terror into Israel’s heartland, and PLO Chairman Yasser Arafat has been unable--many Israelis would say unwilling--to stop them. With their security at risk, Israelis are turning against the autonomy agreement.

Arafat, although a veteran guerrilla leader and wily political manipulator while in exile, has proved a poor governor for the autonomous Gaza Strip since returning last June, and in many important respects his rule has deepened the poverty, increased the chaos and sharpened the despair among Palestinians.

Israeli Prime Minister Yitzhak Rabin, while still committed to the expansion of Palestinian self-government throughout the West Bank, sees such a move as too dangerous now and as one that offers him little political gain--unless he can physically separate Palestinians from Israelis.

Yet such a separation contradicts the pledges of economic cooperation that Israel made to the Palestinians, and it pushes both sides to define their borders and discuss the future of Jewish settlements in the West Bank long before they had planned.

Deadlocks, prolonged and intractable, are typical for negotiations in the Middle East, but they are usually not a cause for such great concern because pessimism has long been the conventional outlook in the region, especially for the Arab-Israeli conflict.

The traditional diplomatic mediators--Egypt, the United States, the European Union--are all trying to help, but so far without success.

Secretary of State Warren Christopher is due in the region Wednesday, followed by Vice President Al Gore two weeks later. Senior Arab diplomats are beginning to talk about a major White House summit soon on the Middle East, although the Clinton Administration said last week that none is yet planned.

A summit organized by Egyptian President Hosni Mubarak last month in Cairo for Rabin, Arafat and King Hussein of Jordan was inconclusive, as was a follow-up meeting of foreign ministers in Washington. The last two one-on-one meetings between Arafat and Rabin also brought no progress.

With implementation of the Palestinian-Israeli accord so uncertain, prospects for a Syrian-Israeli peace treaty are substantially diminished. Negotiations, in fact, are virtually suspended, with Damascus and Jerusalem both insisting, in effect, that the other must make maximum concessions for the talks to proceed.

Dire warnings, meanwhile, are coming from other Arabs about what any failure in the Palestinian-Israeli peace efforts would mean for the Middle East as a whole.

“Delay in implementing the principles of the (autonomy) plan will not only harm Arafat, it will harm the whole region and neighboring countries as well,” Mubarak warned last week. “I fear if (the Israeli-Palestinian accord) fails, we will not return to square one, but to a situation worse than that.”

Such fears are growing precisely because of the hopes aroused when Rabin shook hands with Arafat on the South Lawn of the White House in September, 1993.

Measured against the expectations of that day, the achievements of the last year and a half seem small--not insignificant, because fewer people are dying, but still not the peace that was promised after a century of conflict.

“Israel is in a Catch-22 situation,” Chaim Herzog, the country’s former president and onetime military intelligence chief, wrote in an analysis last week. “It tells the Palestinians it will not extend the scope of their authority until they prove they have taken effective steps to curb Islamic terror. Their reply is that unless Israel gives them more power, they won’t be able to supply more security.

“We are obliged to react to terror, but every reaction . . . could conceivably weaken the Palestinian Authority, whose strength and success is in our vital interest. . . . There is no magic way out of this Catch-22 situation.”

In the view of Nabil Shaath, the Palestinian planning minister and a key negotiator with the Israelis, the current interim stage--the five years of Palestinian autonomy from the end of Israel’s occupation to a final settlement--is failing to establish the confidence necessary for both sides to proceed.

“The interim stage has not changed the image of Palestinians in Israeli eyes, nor vice versa,” Shaath said. “We were not able to give them more security. For them, another Beit Lid (the scene of a recent suicide bombing) will be the end of the road. For us, more settlements on the West Bank are the end.”

One of the great optimists through all the past crises in the Palestinian-Israeli negotiations, Shaath now speaks of the “nightmare option” in which there is “total conflict”--the collapse of the Palestinian Authority in Gaza, a return to the intifada, the Palestinian rebellion against the Israeli occupation, and even an escalation to an all-out war between Arab and Jew.

“This would be a very bloody conflict, worse than before,” Shaath said, “for both parties would resort to terrible brutalities. The call for a jihad (Islamic holy war) would bring even more suicide bombers from among the Palestinians, and the Israeli reaction would be predictably tough and harsh, making it all the easier to recruit such bombers.”

Both Arafat and Rabin, however, face demands from their supporters, as well as from their critics, to slow, to suspend, even to break off the ongoing negotiations about Palestinian elections, Israeli pullbacks and tougher security measures.

Israeli President Ezer Weizman, in an emotional plea after 21 Israelis, mostly young soldiers, were killed in the January suicide bombing at Beit Lid, called for a pause in the negotiations to reconsider the course the country is taking, and he quickly won broad support throughout the country.

Among Palestinians, Information Minister Yasser Abed-Rabbo called recently for a pause to reflect, although for different reasons.

“This kind of negotiation must stop--enough,” he said. “We can drag this out forever and never reach anything, both of us getting more and more frustrated. For our part, we need to ask the Israelis one question: Do you want this process or not? If you do, then you must stop doing what you have done all along through the occupation.”

Through each crisis over the last year, however, Arafat and Rabin have perceived that any further interruption in the peace effort would jeopardize it and even put at risk the gains made so far. What they are searching for, individually and together, is a way to restore the lost momentum as much as solutions to the complex problems they face.

Yet a hard analysis indicates that the basic Palestinian-Israeli deal is still in place and that the current negotiations are difficult precisely because of the fundamental nature of the issues at stake.

In their 1993 accord, Israel and the PLO recognized the legitimacy of each other’s nationalism, which both had long denied, and agreed to divide land that both claimed.

The elections now under negotiation will allow Palestinians to choose their first national government, and the security measures Rabin demands of the Palestinians result precisely from the PLO’s acceptance of Israel.

The dispute over the expansion of Jewish settlements in the West Bank is at the heart of the question of territorial division, as is the definition of the West Bank’s “electoral district.”

“My basic assumption is that agreement between the two sides is larger than one can understand from their public statements,” Yossi Beilin, Israel’s deputy foreign minister, said last week. “Each side understands the other’s red lines (no-give positions), and it’s possible to achieve agreements.”

To get around the impasse, Beilin and some other Israeli and Palestinian officials are suggesting that negotiators jump ahead to the toughest issues--Palestinian independence, permanent borders, Jerusalem’s status, Jewish settlements, Palestinian refugees and security arrangements--that were deferred to the final negotiations beginning in May, 1996.

Other proposals include turning over control of some areas as well as increasing the powers of the Palestinian Authority to regain some of the lost momentum while negotiations continue on troop redeployments and elections.