The Israeli chief of staff, Lt. Gen. Moshe Yaalon, told Israeli reporters on Wednesday that the developments this week might eventually be seen "as the end" of the conflict. "It is certainly a victory" for Israel, he was quoted as saying.

Some Israeli analysts criticized that conclusion as premature, if not hubristic. Yet for now, the American-brokered talks between the adversaries are being held on what appear to be largely Israeli terms.

Negotiators who three years ago were discussing how to divide Jerusalem are debating how to return partial control of cities that were then under Palestinian authority.

"When the intifada began, the demand was, `End the occupation, because the negotiations led to nothing,' " said Samir al-Mashharawi, a leader of the mainstream Palestinian faction, Fatah. "Now, Palestinian demands are to return back to the situation right before the intifada, and we are negotiating about this."

He said that during one of his terms as an Israeli prisoner, he and other inmates demanded chairs and tables. In response, he said, the Israelis took their mattresses. The prisoners demanded them back.

"After a month, they returned the mattresses, and we felt very happy we achieved something," he said. "Israeli diplomacy is based on this idea."

How the Bush administration will press the peace plan forward is unclear. Violence could erupt again at any moment, and Palestinians have proven they can inflict tremendous pain  including economic loss  on Israel. It was no accident that Prime Minister Ariel Sharon chose an economic conference in Jerusalem today to declare, "For the first time since I entered the office of prime minister, there is a real possibility of an end to terror and the return to normal life."

The Israelis appear to be filling in the details of a new American-backed peace plan, which Israel had resisted, to better suit its perceived interests.

The Israeli Army will not withdraw from any more Palestinian cities until it sees that Palestinian security officers are acting against violent groups in Bethlehem and Gaza, where forces pulled back this week, a senior Israeli military official said today.

Mahmoud Abbas, the appointed Palestinian prime minister, may be seen as an Israeli agent if he jails those who violate the truce. He hopes to gain strength as Israel makes concessions, and for now, the main Palestinian factions have voluntarily suspended attacks.

Israel says that it cannot risk being too indulgent and that Mr. Abbas must act against militants in the next two or three weeks or the peace process will freeze.

Over the course of the conflict, Israel maximized its bargaining position, by taking back territory and encouraging settlers to set up new outposts to extend their grip on the West Bank. By contrast, the Palestinians, whose main demand is statehood, find their negotiating leverage much reduced.

Mr. Mashharawi said they had shown that unless the Israeli occupation ended "there will be no peace and security in the region." And he warned of "another intifada" unless the Israelis moved swiftly to give Palestinians independence.

Israelis say they have forced Palestinians to rethink violence. In March 2002, during a wave of Palestinian attacks, Mr. Sharon declared: "The aim is to increase the number of losses on the other side. Only after they've been battered will we be able to conduct talks."

At the end of that March, Israel launched military offensives to seize Palestinian cities in the West Bank, control of which had been ceded under the Oslo peace process.

Now, the senior military official said, "the Palestinians  at least the ones who make decisions  came to the conclusion that violence will not achieve their political goals."

"I cannot say it is over," he cautioned, but he said that if the peace process succeeded, the Palestinian street might come to the same conclusion about violence "in a few weeks, and a few months."

He said the American wars in Afghanistan and Iraq, as well as new pressure from European and Arab states, had also helped change the Palestinian view on violence.

If the Palestinians end their uprising, their remaining levers for negotiations may be time and demography. With the Palestinian population growing rapidly, Jews will become a minority in Israel and its occupied territories within a few years, Israeli experts say. That may put either Israel's Jewish character or its democracy at risk if Palestinians do not form a separate state.

The new American-backed peace plan, known as the road map, calls for a comprehensive Arab-Israeli peace and a Palestinian state in the West Bank and Gaza in just three years. But Mr. Sharon has a longer time line in mind. The second of the peace plan's three phases  a Palestinian state with "provisional" borders  could ease Israel's demographic predicament without forcing it to confront the deepest disputes between the two sides, such as control of Jerusalem.

The military official said that Israel would not begin substantive political negotiations over questions like Jerusalem until the Palestinians had fully broken up militant groups, confiscating their weapons, destroying their training centers, arresting their dangerous members and ending all "incitement" to violence.

"They will have to get rid of all their terrorist capabilities," he said, acknowledging this could take years.

The Bush administration does not appear to be pressing Israel to abide by the plan's schedule. A Western diplomat said the administration was more interested in commitments met than dates kept.

As demanded under the plan, Israel has begun taking down some of the settlers' outposts, though new ones are going up. Little has been said about a freeze on further growth of established settlements called for in the plan's first phase.

To try to raise Mr. Abbas's popularity, Israel has begun releasing some of its more than 5,000 Palestinian prisoners, a step not in the plan. But as one senior Israeli official noted, there is a difference between releasing prisoners and conceding land: freed prisoners can always be arrested again.

(China Daily July 4, 2003)