The Mideast: Peace May Mean Economic Separation

Were the prospects of Arab-Israeli peace too good to be true? Just weeks ago, Israeli Prime Minister Shimon Peres' peace program looked to be winning the hearts and minds of war-weary Israelis. Yassir Arafat, fresh from victory in the December Palestinian election, was consolidating his power while Israelis and Syrians were finally sitting down near Washington to talk seriously about a peace agreement. And multinationals began flocking to the area, scenting a mounting peace dividend: Last month, for example, Citibank opened its first regional office in Tel Aviv in a bid to cash in on the expected peace boom and multibillion-dollar wave of internationally financed projects for the Palestinian areas.

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