I've been hearing about this story for a while now, but didn't see fit to comment, until I saw it re-iterated and analyzed by P. David Hornik in Front Page magazine.
http://www.frontpagemag.com/Articles/Read.aspx?GUID=68F7B87B-4B68-4630-A69D-A852AA1DA398 As you probably already know, Condaleeza Rice, presumably at the orders of President Bush, has gone to Israel with the mission of brokering a peace deal with the Palestinians.
Why, at this late date, anyone in their right minds would attempt such a task amazes me. I would think that, in the 15 years since Oslo, the Palestinians have made it painfully-obvious to all but the most confirmed anti-Semites that they do not want peace with Israel, will not accept peace with Israel, and will treat any agreement as nothing but cover to launch new attacks on Israel. I thought, until the last month or so, that the Bush Administration in particular understood this aspect of reality.
As the article points out, now is a really weird time to be trying to make such a deal. The Palestinians are in disarray and there is no obvious authority on their side with whom to treat. The Israelis are in disarray, with the Olmert Government, in the wake of the disastrous Gaza withdrawal, inept prosecution of the short war in Lebanon, close to collapse. The American Administration is a lame duck, with the identity of its successor anything but clear. And there is a much, much more urgent Mideastern matter to consider: how to stop Iran from obtaining nuclear weapons and with them menaching (or even directly attacking) Civilization, which is now likely to happen by 2009 or 2010.
I hope that the whole point of this is to create a credible "we tried" cover story to tell our Arab allies preparatory to soliciting support for an upcoming war with Iran. I really hope that the foolish Olmert doesn't agree to something stupid to please America.
If Bush and Rice take this seriously, then they are the fools that the Democrats have long accused them of being.