JERUSALEM, 16 April 2004 — So the Palestinians lost.

As Israeli Prime Minister Ariel Sharon headed home with US concessions secured by no other Israeli leader, Palestinians had reason to fear they could do nothing in response but wait and hope the world changes. Prospects for realistic Middle East peace negotiations looked darker than ever. It was not that the pledges Sharon got from US President George W. Bush were entirely new. Few on either side really expected millions of Palestinians would ever rush to resettle in Israel or that the Jewish state would abandon suburban West Bank settlements housing tens of thousands of people under a future peace deal. But by getting Bush to “guarantee” Israel’s claim to some settlements and rule out the refugees’ return, Sharon took away some of the most important Palestinian bargaining chips in any negotiations for a viable state.

“Sharon could not have come away with much more,” said Daniel Neep at the Royal United Services Institute for Defense and Security Studies in London. Well-informed Israeli commentators quoted Sharon, when told of Palestinian outrage, as saying: “I said that we were going to deal them a lethal blow, and they were dealt a lethal blow.”

Bush’s pledges are a welcome tonic for Sharon, slipping in recent polls over bribery scandals — in which he has denied any wrongdoing — and facing opposition within his right-wing camp over his planned pullout from the Gaza Strip. Now he looks much more likely to win the support from his Likud party to push through a Gaza withdrawal that would be popular with most Israelis, while keeping parts of the West Bank he has long deemed essential for Israel’s security. The body language said a lot. A jovial Sharon beamed at the cameras. At his battered West Bank headquarters, Palestinian President Yasser Arafat furiously jabbed the air with a finger.

The prospect of ruling the crowded, impoverished Gaza Strip was bitter consolation for Palestinians, incensed that Bush could “negotiate away” what they see as their rights to land seized by Israel in the 1967 Middle East war. Analysts said that while Bush might want to please the pro-Israel lobby in an election year, his decision was made possible only because he saw Israel’s years of conflict with the Palestinians as part of his own global “War on Terror”. Bush said he still believed a Palestinian state could be formed alongside Israel — if Palestinians stopped militant attacks that have killed hundreds of Israelis, ended corruption and brought political reform.

But the Palestinian Authority, overseeing pockets of territory on the basis of 1993 interim peace accords, has long complained it is Israeli raids that have made it impossible to curb militants or implement reform. They now fear the best state they might ever get will be shrunken and chopped into unviable cantons. The Israelis “would just give up the parts that they do not want”, said commentator Ali Jarbawi. “A state of leftovers

But the question for Palestinians is what they can do other than wait in hope that Bush loses re-election in November and that Sharon gets caught up in a corruption indictment. Their initial response was to try to rally the world to pressure Bush to preserve the violence-stalled peace “road map”, which bears his fingerprints and was meant to lead to a Palestinian state by 2005 through negotiations. Bush’s policy shift angered Arab leaders while the United Nations, European Union and Russia also showed signs of unease. But there was little indication anyone would supplant the United States as the voice that matters in the Middle East. Palestinian militants sworn to destroying Israel promised more armed struggle. But the past three and a half years of attacks and reprisals have brought a state no closer and only driven the United States further toward Israel.

A senior leader of Arafat’s Fatah faction called for urgent talks with Islamic factions in order to find a more unified position that might give the Palestinians greater strength. But some Palestinians wondered whether the right response to Bush’s pledges would be a much more drastic one. “The only way the Palestinian Authority can react is to make a serious threat to the world that it might disband and dissolve itself,” said Jarbawi. “If there will be no state then to me it is better the Palestinian position to Israel should be ‘take it all’ and see what they can do.”