President Clinton is sending his seasoned envoy, Mr Dennis Ross, back to the negotiating fray in the Middle East this week and analysts say all sides - the US, Palestinians and Israelis - may have interests in reaching a deal to break an 18-month impasse. Mr Ross arrives tomorrow with a mandate to "narrow the differences between the parties".
Although analysts caution against optimism in light of the remaining gaps, Israeli and Palestinian officials say a three-way summit with Mr Clinton to seal a deal could take place in late September provided there is sufficient progress.
Dr Mark Heller, of Tel Aviv University's Jaffee Centre for Strategic Studies, believes Mr Clinton would not have sent Mr Ross if negotiations on a US land-for-security plan had not entered the final stretch.
"There's probably an assessment that the deal is almost sewn up. There would be a lot of reluctance to send Dennis Ross if he weren't going to be able to announce something," Dr Heller said.
He said Washington badly needed to score a Middle East success to offset criticism that it had waffled over Iraqi arms inspections and alienated Arabs over strikes on Sudan and Afghanistan after the bombing of US embassies in Africa.
For months, the Israeli Prime Minister, Mr Benjamin Netanyahu, has resisted US proposals to transfer another 13 per cent of the West Bank to Palestinian self-rule as harmful to Israel's security.
But Netanyahu insiders have recently said that the 13 per cent figure is now acceptable - provided Palestinian control is limited in three per cent designated as "nature reserves".
Mr Netanyahu has said he will not allow hardliners in his rightwing and religious coalition to block a deal he felt satisfied Israel's security requirements, even if it meant calling for new elections.
Dr Heller said a breakthrough now could give Mr Netanyahu a golden chance to extend his political life by calling an early election on the laurels of a deal, but before a crisis in May, 1999.
The Palestinian President, Mr Yasser Arafat, has declared his intention to declare an independent state in May 1999, when a five-year interim period to reach a final Israeli-Palestinian peace deal expires. But a Palestinian analyst, Mr Ali Jarbawi, said striking an accord now might give Mr Arafat ammunition to ensure he gets even more territory before next May in a subsequent mandatory Israeli withdrawal.
"Arafat could use the postponement of the declaration of the state as a bargaining chip," he said.
Meanwhile, figures published yesterday show the number of Jewish settlers in the West Bank and Gaza jumped 8.8 per cent in 1997 and rose a further 3.3 per cent in the first half of 1998 to nearly 170,000.
A spokesman for the Israeli Interior Ministry confirmed the statistics, published in the daily newspaper Ha'aretz, as accurate.
About half of the settlers live in nine of a total 144 settlements, the report said. Last month Israel's housing ministry said almost a quarter of the housing units built by the government in West Bank settlements between 1989 and 1992 had never been occupied.