National Review: Sharon's moves: in Jerusalem and environs, pivotal times

POLITICAL turmoil is the normal state of affairs in Israel, and Prime Minister Ariel Sharon has never been one to avoid it. He thrives on risk. At the moment he is engaged in controversial policies that are either bold forays into the unknown or Clintonesque diversions from personal failings. He may be toppled by accusations of corruption--or he may be reconfiguring the Israeli-Palestinian standoff.

To take the accusations first: Financial scandals have a way of enveloping Israeli politicians, and Sharon is not exempt. Investigators recently questioned him for several hours. What they are probing is a bribery charge. An Israeli businessman named David Appel has property interests in Greece. In particular, he was hoping to develop a casino on an unspoiled island in the Aegean, and this would involve dispensations from environmental laws. Appel is said to have paid hundreds of thousands of dollars to Gilad Sharon, one of the prime minister's sons, with a view to securing intervention at the top with the Greek government. Officials of the Justice Ministry are weighing the evidence, and will decide whether to prosecute in the coming weeks.

Nor is that all. There's another ongoing investigation into alleged overspending by Sharon and his Likud party in elections to the tune of $1.5 million, which was repaid through a transfer of that amount to Gilad's account by Cyril Kern, a businessman from South Africa, and said to be a family friend and well-wisher. And this itself may be a further infringement--Israeli political parties are forbidden to accept foreign contributions. A television channel broadcast a tape in which Sharon appears to be discussing campaign contributions from abroad. According to opinion polls, about half of Israelis believe that Sharon should resign, if only until these matters are cleared up.

Whatever the truth, these destabilizing issues are unfolding at a moment when conflict with the Palestinians appears to offer nothing but bloodshed into the indefinite future. But is it possible that Sharon thinks otherwise? And that he has the imagination to give the Palestinians the state they always rejected--most recently when his predecessor, Ehud Barak, was in power--as well as the drive to realize it?

There are signs and portents to that effect. Behind the scenes, the German intelligence service specializes in human swaps, and has just arranged one between Israel and Sheikh Hassan Nasrallah, leader of Hezbollah, the Shia terror group that Iran and Syria together sponsor and control in Lebanon. Israel agreed to release 436 prisoners, some of them terrorists, others criminals, and including a Shia cleric, Sheikh Abdel Karim Obeid, kidnapped years ago as a hostage. In return Israel has received the corpses of three soldiers killed in an ambush at a time when its forces were still in southern Lebanon, and an elderly colonel of the reserves, lured to Dubai on some shady enterprise of his own and seized there. The numbers are so unequal that Arab spokesmen were quick to claim a victory, promising more ambushes and kidnapping to effect further one-sided exchanges. Israeli and some Western commentators were equally quick to lament defeat through concessions to terror. Both may be wrong. The inequality of numbers prompted Nasrallah himself to compliment Israel on its determination to look after its own, saying on Hezbollah television: "Sworn enemies are we, but such values must be admired." Maybe he's prudent because the United States is pressuring his masters in Tehran and Damascus without whose backing he is nothing; maybe he knows it's a time for deals.

More dramatically, Sharon has just made a speech to say that a day will come when there will be no more Jews in the Gaza Strip. Seventeen of the twenty-one settlements there, involving some 7,000 people, already appear earmarked to be abandoned. This astonishing reversal came out of the blue; more than anyone, Sharon has identified himself with settler aspirations.

Protecting these settlements, dozens of soldiers have been killed in hit-and-run tactics similar to those Americans face in Iraq. But unilateral withdrawal goes far beyond a cost-benefit analysis, touching on fundamental Zionist claims that Jews have every right to live where they like in the whole of the land they say is theirs. The Likud party has come to a bewildered standstill. Smaller hardline Zionist parties are preparing to leave the governing coalition. The settlers themselves are demonstrating their intention to stay put, no matter what, and they and their supporters argue that here is a surrender comparable to the exchange of prisoners with Hezbollah. The Palestinians are getting something for nothing, which means that terror pays after all. But the Israeli Left believes in peace through concessions, and looks prepared to join Sharon and Likud in a Government of National Unity, as once before in pre-Oslo Accord days. Searching for anything that might be progress, the Bush administration is pushing Sharon. Deputy secretary of state Richard Armitage for instance says that a pullout from the Gaza Strip would be "a step in the right direction."

In another bolt from the blue, Sharon is proposing to study whether it is feasible to hand Umm al-Fahm--a picturesque and exclusively Arab town in the Galilee hills--over to a future Palestinian state. Anxiety about future demographic imbalance lies behind what looks like more unilateral retreat. But in another unexpected turn, spokesmen for Umm al-Fahm have declared that the town's inhabitants are indeed Palestinian Arabs but also Israeli citizens, and they won't be handed over like this. Social and economic considerations, in short, count for more than ethnicity and Arab nationalism.

These moves and proposals are taking place in the context of the security fence now visibly separating Israelis and Palestinians on the West Bank. For most of its length it is not a concrete wall but raked earth, wire, and sensors, all removable one day. Parts of its course are still under discussion, but construction should be finalized by the end of next year. Humanly, it creates hardship; aesthetically, it is brutal; politically, it may offer opportunity.

Things have never been so bad for the Palestinians. Their president, Yasser Arafat, squats in the ruins of his headquarters in Ramallah on the West Bank. Temperamentally destructive, he has long been politically sterile. His abuses of power and money are bywords. In defiance of the law, there have been no elections for 15 years. Corruption is systemic. Arafat's wife Suha lives in Paris, and French authorities are investigating payments totaling $11.4 million from Swiss banks into her personal account. Extraordinary even by local standards, Ahmed Qureia, the Palestinian prime minister, and Jamil Tarifi, the minister of internal security, are both accused of having interests in companies profiting from the building of the security fence through the sale of cement and other materials.

Hitherto Arafat and his Fatah organization at least maintained law and order of a crude sort. Now gunmen rule, in a replication of what their peers are trying to do in Iraq. Nablus, largest of the West Bank towns, is at the mercy of a couple of young hoodlums and their gangs who have either shot dead, or shot at, leading personalities. Nobody dares do anything about it. In Gaza City, another gang of armed men shot up police headquarters, though they missed Gen. Ghazi al-Jabali, the police chief they probably intended to kill. Hamas and Islamic Jihad terrorists are mobilized to make an armed bid for power at the right moment. Israelis may kill in "targeted assassinations" those who plan or intend to carry out suicide bombings, but as many Palestinians die in factional lynchings and executions.

Constant rejection of each and every proposal for a state has led to today's general collapse. Lawyers are currently arguing on Arafat's behalf in the International Court of Justice in The Hague that the building of the security fence is illegal. Yet again, this is a rejection, perhaps a last-chance rejection. Granted all its flaws, the fence still offers the Palestinians an outline of the state that alone can enable them to live as a nation like any other. Sharon's several initiatives may of course come to nothing except his own downfall, but their logic is to pressure the Palestinians into breaking with the past and accepting at this late moment that even partial statehood is better than none.

Mr. Pryce-Jones is an NR senior editor and the author of, among many other books, The Closed Circle: An Interpretation of the Arabs.