A small Middle Eastern country of global significance. Israel's relations with its neighbours, and the success or failure of the Middle East peace process, will determine the future of many millions of inhabitants of countries far beyond its horizons. Economies in a dozen countries could bloom or wither depending on the outcome. Careers in Washington can founder on a single anti-Israeli remark. Muslims, Jews and Christians of five continents follow the fate of Jerusalem and their Holy Land. Opinion among Israelis is divided over whether to give Palestinians what they want, within limits, or tough it out and prevent Arafat and the Palestinians from expecting too much. Israel has lost too many of its sons and daughters in conflict to take this choice lightly. Ehud Barak was elected amid high hopes that he will find the right balance, and release the peace process from three years of paralysis.