Israel continues to make progress towards peace....

It appears Netanyahu has agreed with George Mitchell on terms of reference for peace...

I think Benjamin Netanyahu has gone through a personal evolution a little like my own. He continues to be profoundly skeptical that signing a piece of paper can put an end to this conflict. He is a fierce advocate of defensible borders and military strength as the true guarantors of Israel's security. Nevertheless, he has come back to a second term as prime minister with a deeper appreciation of the reality that his relations with the United States, Europe, and moderate Arab neighbors depend on the perception that he can be a partner in the search for diplomatic progress with the Palestinians. And he certainly knows that many harbor doubts about him.

That is why Bibi agreed to do something unprecedented, something that six previous Israeli prime ministers since the 1993 Oslo Accords (Rabin, Peres, Barak, Sharon, Olmert, and Netanyahu himself in his previous term) refused to do. Very much against the will of his party and coalition, Netanyahu consented to putting a freeze on "natural growth" of settlements. He has drastically curtailed the volume of construction starts, even in the "consensus" settlement blocs that he believes were conceded to Ariel Sharon by George W. Bush.

Now, below the radar, Netanyahu is making a series of additional concessions to Barack Obama and his Mideast peace envoy, George Mitchell. Their current priority is negotiating "terms of reference" to permit the resumption of Israeli-Palestinian negotiations (TORs in negotiators' vernacular). Dismissed by some as mere "talking about talking," TORs are in fact vital elements to create the parameters for serious negotiations. For example, then-Secretary of State James Baker shuttled around the region for eight months to negotiate the TORs that made the 1991 Madrid conference possible. All that was done just to phrase a letter of invitation that all sides could accept. The result was far from trivial; it was a framework that opened the way to all the direct negotiations that followed over the ensuing two decades.

Mitchell's challenge today is to define such a framework that can bridge differences between Netanyahu and his Palestinian counterpart, Mahmoud Abbas. Defying skeptics who say you can bridge a river but not an ocean, Mitchell keeps going at it, and his perseverance is paying off. While no one was watching, Netanyahu has in fact agreed to language that Mitchell can accept. With the Israeli agreement in his pocket, Mitchell is now working to bring Abbas around, according to sources close to the discussions.

The issues are not small. Abbas wants to enshrine the 1967 boundary as sacrosanct, even though that line was merely a military demarcation after the war that ended in 1949 and had never been recognized by the Palestinians or anyone else as a legal border. Reflecting the Israeli consensus, Netanyahu insists that future agreed frontiers have to meet Israel's security imperatives and reflect post-1967 demographic realities, whether or not they diverge from the former armistice line. But Netanyahu has accepted a solution based on Secretary of State Hillary Clinton's formulation: "an outcome which ends the conflict and reconciles the Palestinian goal of an independent and viable state based on the 1967 lines, with agreed swaps, and the Israeli goal of a Jewish state with secure and recognized borders that reflect subsequent developments and meet Israeli security requirements."

Abbas wants Israeli territorial concessions in Jerusalem as a precondition for negotiations. Netanyahu has accepted that the Palestinians will bring their claims for Jerusalem to the table, but he is not going to make this or any other concession just to bring Abbas to negotiate. Mitchell's TORs will include implementation of all existing agreements between the parties, as well as the 2003 "Roadmap" for a two-state solution. These already define Jerusalem as a subject for discussion.

Abbas wants an absolute two-year deadline for the achievement of a permanent agreement. Netanyahu is accepting target dates for agreements, but he does not believe achievement can be guaranteed. Mitchell has the language he needs for the TORs regarding target dates.

Abbas wants language that obliges Israel to repatriate and compensate descendents of Palestinians who lost their homes in the upheavals before 1949. Netanyahu has agreed to participate in multilateral solutions for this "refugee" problem, provided these solutions do not include an obligation that will dilute Israel's own Jewish majority. Mitchell will point out that a solution to the refugee question is already incorporated in the documents to which the TORs will refer.

Abbas wants the 2002 Saudi-initiated Arab Peace Initiative to be the basis of negotiations. Netanyahu has agreed to have it listed among the references, though it is not among the signed agreements whose specific terms are binding. In any case, the Roadmap already contains a positive reference to the Saudi peace plan, and the Roadmap will be a major source document for the TORs.