The fighting in Israel and the Palestinian areas has already left scores dead and hundreds injured. But many analysts think that if the turmoil is not stopped soon, it will have huge repercussions across the Middle East and the oil-rich Gulf region. And it could have a profound impact on U.S. policy in the region.
In fact, a new political era may well be dawning in the Middle East. The painfully slow peace talks between the Palestinians and Israel look dead--at least in their recent form. President Bill Clinton might still pull off a miracle. But if the peace process is over, the Palestinians and Israelis will go their own ways: The Israelis would try to seal themselves off from Palestinian areas. Yasir Arafat would declare his long-promised Palestinian state--which could prove politically and economically unstable.
The result may be a serious decline in American influence in the Middle East. Already, Arab governments around the region seem to be rethinking the close ties that have prevailed between many of them and Washington since the 1991 war with Iraq. "This is the end of the current formula for American hegemony in the region," says Yahya M. Sadowski, an analyst at Petroleum Finance Co., a Washington consultancy. "The Arabs have been put in a position where they can't afford to be seen collaborating with the U.S."
CLINTON REBUFFED. It seems the decade-long Pax Americana is breaking down throughout the region. With President Clinton's authority waning, he will find it difficult to bring Israeli Prime Minister Ehud Barak and Palestinian National Authority chief Arafat together, let alone bridge the widening differences between the two sides.
The shock waves from the turmoil are rapidly spreading beyond Israel and the Palestinian areas. Violence has erupted on Israel's border with Lebanon, which had been quiet since May. And the constant stream of broadcasts showing Israeli troops firing on demonstrators is putting all the Arab governments on the defensive. That makes it hard for them to cooperate with the U.S., Israel's chief backer. Egypt, for example, has been stiffing Clinton's request to host a last-ditch peace conference. Instead, it's arranging an Arab summit that would likely include Iraq, which the U.S. has worked hard to isolate since 1991.
But the demise of Pax Americana could have as many economic as political repercussions. On Oct. 9, Saudi Arabia's Crown Prince Abdullah warned Israel that the kingdom would not stand by if it attacked Lebanon or Syria. His comments raised fears that Saudi Arabia might cut its oil production. At a time of tight markets, that was enough to give a sharp upward jolt to prices.
Indeed, there is an eerie resemblance between the present and 1973, when the Arabs punished the West by slashing oil production. Once again, conflict in the Middle East is occurring at a time when there is little spare oil production capacity. That means the oil markets are listening closely to the words of the Saudis, the largest producer, trying to divine their intentions. While it seems unlikely that Saudi Arabia would participate in a new embargo, it might come under pressure to be less forthcoming on producing even more oil.
NO QUICK FIX. Certainly the tight oil situation gives clout to the Iraqi leader, Saddam Hussein, who is posing as champion of the Palestinians. It would be difficult for the world to replace the Iraqis' 2.1 million barrels per day of production. That gives credibility to Saddam's hints that he might stop the flow--even if, as some analysts think, he has no intention of halting supplies.
Given all these crosscurrents, it's close to impossible for the U.S. to find a quick remedy. Instead, the U.S. should rethink its entire approach to the Mideast. The agenda should include a reappraisal of the increasingly ineffective 10-year-old sanctions against Iraq. And there should be straight talk with the Saudis and Egyptians about what they expect of the U.S. and what the U.S. expects of them--in particular when it comes to the peace process. It's too late for the dying Clinton Administration. The election of a new President will provide a fresh start.