The United States has warned that it is on the point of formally announcing the collapse of the Middle East peace process. While some Israeli ministers dismiss such talk as psychological warfare, the signs are that such an announcement would trigger the collapse, in turn, of the Netanyahu government.
President Clinton is to decide today, in consultation with his State Department team, whether there is any point in making yet another series of efforts to persuade Israel's Prime Minister to go ahead with a long overdue West Bank troop withdrawal.
Members of Mr Netanyahu's coalition insisted yesterday that government approval for the withdrawal was close at hand. But the moderate Israeli opposition Lab our Party was not convinced, nor were many officials in the Clinton administration.
The State Department spokesman, Mr James Rubin, said on Tuesday that the US was on the point of throwing in the towel. "If we conclude that we simply cannot reach an agreement," he said, "then we will need to come out and say so, and explain why. And that day is not far off."
Were the US publicly to declare the peace process over, signs are that this would signal the demise of Mr Netanyahu's fractious, multi-party coalition.
Much has been heard in recent months of hard-line, right-wing coalition members urging Mr Netanyahu not to give up further West Bank land and threatening to force him out of office if he "capitulates" to American pressure. But there are also several dovish coalition members who have made clear they will bolt the government, and deprive it of its Knesset majority, if Mr Netanyahu closes the door on peace.
Opinion is still divided, even among close aides to the Prime Minister, as to whether Mr Netanyahu will, at the last minute, agree to the West Bank land handover, or whether he is prepared for a confrontation with the Arab world, Europe and the United States. Gen Ariel Sharon, the Minister for Infrastructure, who is one of Mr Netanyahu's most vociferous critics, told his cabinet colleagues yesterday that, for all the Prime Minister's protestations to the contrary, the troop withdrawal deal was "all sewn up."
One supporting pointer is the news that Mr Netanyahu has been seeking an additional $1 billion in American aid to finance the redeployment. Other sources in the Prime Minister's office, though, are adamant that he will not sanction any further withdrawals until the Palestinians have introduced a new, peace-oriented PLO guiding covenant and taken firmer steps to quash Islamic extremist groups.
EU ambassadors, at a meeting yesterday with the Israeli Finance Minister, Mr Ya'acov Ne'eman, said that the EU was not on the point of boycotting exports from Israeli settlements, and agreed to continue a dialogue with Israel over the problematic issue of goods from the settlements, carrying "Made in Israel" labels, being exported under the favourable customs terms of Israeli-EU trade agreements.
The Palestinian Authority is reportedly building a new parliament chamber at Abu Dis, just outside the municipal borders of Jerusalem. Palestinian officials are refusing to confirm that the new building is intended for a parliament, apparently because of fears of a backlash from the Palestinian public, which might regard the project as a capitulation to Israel.