Mid-East peace moves threatened

The US envoy has been trying to implement a truce

		By Roger Hardy BBC Middle East analyst

The raid on the Israeli army post near the Gaza Strip comes as American and European diplomats, encouraged by a recent decline in violence, have been trying to revive dialogue between the two sides.

The attack threatens to slam shut the tiny window of opportunity opened up by the significant lull of the last three weeks.

Before the latest attack, violence had significantly dropped

Anthony Zinni, the US special envoy, left the region a few days ago, cautiously optimistic that progress was possible.

But his visit was overshadowed by the Israeli capture of a ship laden with weapons - weapons destined, the Israeli insist, for Yasser Arafat's Palestinian Authority.

Now the hawks in the Israeli cabinet will be arguing even more strongly that Mr Arafat's speech in mid-December calling for a halt to all violence was a mere tactical ploy.

They favour a complete break with the Palestinian Authority.

That would mean ending the contacts Foreign Minister Shimon Peres has been maintaining with Palestinian officials, and would undermine American-led efforts to revive some sort of peace process.

The attack exposes the limits of Mr Arafat's ability to rein in the militant Islamic group Hamas.

He had reached an understanding with Hamas whereby it would suspend attacks within Israel.

This latest attack - though close to the Gaza Strip - was inside Israel's borders.