Even relentless optimists have learned to be cautious about the Middle East. But a new flicker of hopefulness is beginning to spread, and here's a central reason: Both sides now realize it is in their own economic interest to pursue a political solution.
The cycle of revenge that has long lashed Arabs and Israelis together has not ended. But hard-nosed practicality might accomplish what endless speeches about harmony have failed to achieve. It could provide the incentive for leaders on both sides to make the painful concessions that peace will require.
These leaders seem to be adopting a new version of an old saying: Blessed are the peacemakers because they're the ones who will make it possible to have economic stability.
Israeli Prime Minister Ariel Sharon gave an indication of his new thinking in an extraordinary speech to his party's parliamentary deputies: "You may not like the word, but what's happening is occupation. Holding 3.5 million Palestinians is a bad thing for Israel, for the Palestinians, and for the Israeli economy."
Most reactions focused on Sharon's use of the incendiary word "occupation," the first time he'd used it. But equally significant was his reference to the damage inflicted on the Israeli economy by endless unrest.
Israel's economy has contracted for three straight years, the worst performance since its founding 55 years ago. And Sharon, finally, has recognized the link between this and deteriorating relations with the Palestinians.
"He has drawn the connection now," a U.S. diplomat with long ties to the region told us, "and he believes it."
That comment reflects judgments being made in Israel itself. Writing in the respected daily Ha'aretz, Ami Ginsburg noted that the Israeli stock market surged by 7 percentage points the day after Sharon's remarks. His words "imbued traders with optimism," she wrote.
Another Ha'aretz commentator, Yoel Marcus, added: "Sharon is going through a maturation process and beginning to digest the bitter truth that he cannot eradicate terror and improve the economic situation without a political solution."
Economic conditions in the Palestinian territories are even worse than in Israel. The Palestinian Trade Center estimates that of the 232 companies that engaged in export before violence erupted almost three years ago, only 46 are still in the trading business. Palestinian Labor Minister Ghassan Khatib estimates that unemployment is at 70 percent and that half the population lives below the poverty line.
As a result, Sharon might now have a negotiating partner, Palestinian Prime Minister Mahmoud Abbas, who understands the same "bitter truth"