Peace effort seeks to repair damaged U.S. image

By Alistair Lyon, Special Correspondent - Analysis

BEIRUT (Reuters) - By hosting an Israeli-Palestinian peace conference, President George W. Bush seems finally to have heeded arguments that only by tackling the Middle East's core conflict can he begin to restore U.S. credibility in the region.

That credibility has plunged largely as a consequence of the Bush administration's efforts to remake the Middle East after the September 11 attacks by invading, isolating, threatening or imposing sanctions on its foes and those of its Israeli ally.

In the process, conflicts involving Iraq, Iran, Lebanon, Syria, Israel and the Palestinians have become dizzyingly intertwined in a region polarized between the United States and its main opponents -- Iran, Syria, Hezbollah and Hamas.

The conference starting in Annapolis, Maryland, on Tuesday may go some way towards mitigating the dismay this has created among many Arab and European governments who fear that Bush's "war on terror" has only spawned more al Qaeda-type militancy.

"From Morocco to Afghanistan, the bad guys are winning," the European Union's Middle East envoy Marc Otte said. "If we want to start reversing the trend, we've got to start somewhere, and that somewhere is a two-state solution in Israel-Palestine."

NEW PRAGMATISM?

While expectations are low for any major progress at the Annapolis talks, some Arabs see a shift in U.S. attitudes.

"Whether out of desperation or realism, the Americans are becoming more pragmatic. They are beginning to engage with Syria and Iran and trying to solve political problems through political means, not through threats, invasions, sanctions and regime change," said Beirut-based commentator Rami Khouri.

Others see the latest U.S. stab at Middle East peacemaking as part of a strategy to form a broad coalition to counter Iranian influence that has risen since the 2003 Iraq invasion.

"There is a convergence of interests of Israel, the Arabs, the United States and the EU," Otte said in Berlin last week.

"Call it a cynical bargain. The Arabs will help the United States on Iraq and Iran if the West helps towards a resolution of the Israeli-Palestinian conflict, because that is what is inflaming Arab opinion," he added.

Excluded from Annapolis, Iran and its Palestinian Islamist ally Hamas have derided anyone expecting a solution to emerge.

Iran's Supreme Leader Ayatollah Ali Khamenei said on Monday the talks were "doomed to failure". Hamas has voiced shock that Arab states, including its ally Syria, had decided to take part.

The chances that Bush, Palestinian President Mahmoud Abbas and Israeli Prime Minister Ehud Olmert can resolve a 60-year-old conflict that has defied so many others seem slim, but Syria's attendance opens up a tantalizing side-opportunity.

President Bashar al-Assad's decision to send his deputy foreign minister marks a cautious willingness to explore whether Bush is prepared to work with a country he has previously deemed an evil-doer for its policies on Iraq, Lebanon and Israel.