PARIS — Paris.--THE CONFIDENCE Israel's Yitzhak Shamir expressed after meeting George Bush last week was a whistle in the dark. Things could scarcely be worse for Israel. They are worse, perhaps, than even Mr. Shamir understands.
First is the threat from Saddam Hussein, which the Mr. Shamir understands very well. Americans debate whether Iraq's threat to them is such as to justify war. For Israel no doubt exists. If Mr. Hussein survives his confrontation with the U.N. and the United States, he provides the biggest external threat to Israel's existence the Jewish state has yet confronted. Will he survive? If he plays his cards right, yes.
Thus the pressure on Israel's government to pre-empt the outcome of this crisis by precipitating a war is very considerable. If the U.S. does not attack, Israel must contemplate a disarming strike against Iraq's advanced weaponry installations. As those now are dispersed, fortified and defended, such a strike may not be decisive. It could leave Israel worse off than before, in a war, by itself, against Iraq.
However, another possibility exists, more radical than war, and even more difficult for Israel's political class to accept. It is for Israel to pre-empt settlement with the Palestinians, moving to isolate Mr. Hussein and exploit the present divisions in the Arab camp. This would take advantage of the current weakness of the Palestinians and make the most of the Soviet Union's new willingness to play a constructive Mideast role.
The United States government would rejoice, and do everything in its power to make such an initiative succeed. So would the European democracies. Guarantees of a settlement and of Israel's post-settlement security would follow. A settlement that worked would itself be the best guarantee Israel has ever had of its security.
Israel otherwise is on the road to isolation. But if it were pre-emptively to make serious proposals to the Palestinians (inevitably, to the PLO as well), and negotiate seriously, it could dominate the situation and call the U.S. and the Europeans to its support. What Israel requires is a political audacity in peace comparable to that military audacity it always has shown in war.
There will never be a better opportunity. The Palestinian issue has to be settled. Every Israeli realist recognizes that. Israel can't go on like this. The intifada is controllable at present levels of violence -- but at corrosive costs to Israel's morale and political well-being.
To seal off the occupied territories, or expel Palestinians from Israel, or even expel them from the occupied zones, which some Israelis are demanding, would solve the problem of domestic insecurity by creating two new problems, the sacrifice of Israel's reputation as a society of respect for human rights, and the creation of a second immense wave of Palestinian refugees -- devoted to the destruction of the Jewish state.
Better ideas exist, but Israel suffers political paralysis. Real and legitimate divisions of public opinion combine with a politically 00 pernicious electoral system of extreme proportional representation to produce governments which -- whether headed by Likud or Labor -- have proved incapable of decisive action to liberate the country from its Palestinian dilemma.
And time is running out. This is something neither Mr. Shamir nor the mass of the Israeli electorate may fully appreciate. The relationship of Israel to the U.S. has seemed very solid but it is in fact fragile. If the Persian Gulf confrontation ends in a victory for the United States, the ''moderate'' Arab governments allied with it will be America's new friends in the Middle East and they will demand a Palestinian settlement as reward.
But if the affair ends badly for the U.S., Israel risks being blamed, either because Saddam Hussein will have succeeded in turning the crisis into an Arab-Israeli conflict and dividing the U.N. coalition, or because Israel will have intervened to the same result, or simply because Israel's conflict with the Palestinians has since 1948 been at the source of the Arabs' confrontation with the U.S. and the West.
The intransigence of the Shamir government, and the brutality of its policies in the occupied territories (now including snipers, to shoot Palestinian stone-throwers), has already alienated the Bush administration. Congress also is furious because the Israeli government asks loan guarantees to settle Russian immigrants but arrogantly refuses to accept congressional demands that these funds not finance settlements, contrary to international law, in East Jerusalem and the occupied territories.
Until now it has been politically unprofitable and even dangerous for a U.S. political leader to criticize Israel's policies. The glacier of American opinion moves, though; and glacial movement, however slow, cul- minates in rivers and torrents. It is now possible to imagine a day when opposing aid to Israel wins votes in U.S. elections, rather than losing them. That is why Israel today is at a point of maximum opportunity, and maximum danger.