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By Jim Wooten and Scott McKenzie

J E R U S A L E M, Oct. 14 - This time, the violence is different.

More than ever before, when a Palestinian youth throws a rock in
anger or an Israeli soldier shoots to kill, the actions strike at the
heart of an agreement that had never been closer. Now, that agreement
never seemed further away.
Just a few months ago, Palestinian leader Yasser Arafat and Israeli
Prime Minister Ehud Barak walked side by side through the woods at Camp
David. Last month, they met for a casual meal at Barak's home, and were
negotiating issues that could have led to creation of a Palestinian state.
Sources told ABCNEWS the framework for a peace agreement had been
further along than openly stated, that both sides were at the stage of
"dotting the I's and crossing the T's" in a contract for peace.
On Friday, Israelis and Palestinians appear to be enemies in all but
name. About 100 people, mostly Palestinians, have been killed.
And the violence that has put the West Bank and Gaza on a war footing
has claimed what diplomats fear could be the most serious casualty so far:
the peace process itself.
"Once it was on the table of negotiations," says Faisel Husseini, a
member of the Palestinian Authority's exectutive committee. "Now, it is
through airplanes and through bombing from the airplanes toward the
Palestinians. I don't know what it will be tomorrow."
One of Israel's top generals - speaking about an Israeli helicopter
gunship attack on a Palestinian police station after a Palestinian mob at
the building killed two Israeli soldiers - left little room for doubt over
the Israeli position on what tomorrow could be.
"The attack that we delivered [Thursday] was just the balanced way to
show that we are not going to tolerate this kind of violence any more,"
said Gen. Giora Ilana.
Israeli officials pointedly said that the weaponry they unleashed was
just a fraction of what they have in their arsenal.

Old Glory Burns

Many people in the world are asking how the situation deteriorated so
quickly. Still more are asking how it can ever be put back on track.
In the United States, many Americans are wondering why Washington has
involved itself so heavily in brokering a peace.
Palestinians on West Bank streets are blaming the United States as
much as Israel. At the funerals of Palestinians killed in the fighting,
the burning of the U.S. flag has become commonplace.
"I think Israel is the capital of America," screamed a Palestinian
man in the West Bank city of Nablus this week.
Nevertheless, President Clinton has persisted and looks likely to
bring together a meeting by early next week in Egypt, which would put
Arafat and Barak in the same city, if not the same room.
But as efforts to pull the peace process out of the diplomatic mire
continue, fears on the streets of cities in Israel, Gaza and the West Bank
continue to fester. With anti-Israeli sentiment raging and Israeli
citizens on the offensive, the most-feared eventuality would be any overt
military moves by surrounding Arab nations, most notably Syria.
Iraq has been moving large numbers of its forces, although analysts
say they don't foresee any military action.
Meanwhile, questions hang over just how much control Arafat maintains
in the streets. Israeli officials call it "riding the tiger" - bitter
shorthand for what they say is Arafat's tacit encouragement of street
battles roiling the West Bank and Gaza Strip.
Whether Israelis are right, the question is just what they will do
about it, and whether this round of violence, of rock-throwing and
rubber-coated bullets, will recede into memory any time soon.

ABCNEWS' Chuck Lustig in Jerusalem contributed to this report.

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