Secretary of State Condoleezza Rice has clearly spelled out how the Bush administration expects the Palestinian peace process now under way to unfold.

Palestinian President Mahmoud Abbas and Israeli Prime Minister Ehud Olmert are to hold preparatory meetings to define major elements of a settlement. The draft outline is then to be submitted to an international conference to be assembled in Annapolis, Maryland, at the end of November with a membership yet to be chosen.

The secretary of state has shown determination and ingenuity to bring matters to this point. Her next challenge will be to steer the process so as to avoid the risk of what happened at Camp David in 2000, when Israeli and PLO leaders sought an agreement only to see it blow up into a new crisis that continues to this day.

What is unique about the Annapolis conference is that the outcome is to be agreed in advance. What remains uncertain is the ability to implement it.

The process is being driven by the assumption that the parties can be led to accept by the end of November - or have already tacitly accepted - the so-called Taba Plan of 2000, developed in the wake of the abortive Camp David meeting by technically non-official negotiators.

It provides for Israeli withdrawal to essentially the 1967 borders (with minor rectifications), retaining only the settlements around Jerusalem but narrowing the corridor between two principal Israeli cities, Haifa and Tel Aviv, to about 20 miles. The to-be-created Palestinian state would be compensated by some equivalent Israeli territory, probably in the underpopulated Negev.

Israel seems prepared to agree to an unrestricted return of refugees to the Palestinian state but adamantly refuses any return to Israel. Plausible reports have the Israeli government willing to cede the Arab neighborhoods of Jerusalem (as yet undefined) as the capital of a Palestinian state.

If matters are indeed brought to this point, it would reflect a revolutionary change of perceptions on both sides.

The intifada and the global momentum of radical Islamism have brought home to the Israeli public and leadership that their state is threatened by four new and growing dangers: first, an altered security environment in which the principal threat is from groups with no defined geography and operating from small, mobile bases; second, the demographic challenge because the alternative to a two-state solution could become a single state in which the Jewish population turns into a minority; third, the existential threat of nuclear proliferation, especially from Iran; and finally, an international environment in which Israel finds itself increasingly isolated because of the growing perception in Western Europe and in small but influential circles in the United States that Israel's alleged intransigence is the cause of Arab hostility to the West.

At the same time, the emerging fear of Iran has caused a reordering of priorities in the Arab world. For the moderate Sunni states, the danger of a dominant Iran has emerged as their principal preoccupation.

The confluence of American, Arab, Israeli and European concerns encourages the hope that an agreement between Israel and its Arab neighbors would ease, or even eliminate, their common fears.

Will diplomacy be able to deliver on these expectations?

The interlocutors on both sides have extremely shaky domestic positions. The governing coalition in Israel has collapsed, and the approval ratings of the Cabinet are at a historic low.

The definition of a Palestinian partner has so far proved elusive. Gaza is governed by Hamas, which is unwilling to recognize the legitimacy of Israel, not to speak of the specific terms under negotiation. Who then takes responsibility for Gaza? And it is unclear how much of the West Bank population Abbas can speak for.

Several Arab states have declared their willingness to recognize Israel once it returns to the 1967 borders. But recognition of the existence of a state has historically been treated as a factual, not a policy, matter. A key question, therefore, becomes exactly what is meant by "recognition." Will the moderate Arab states place pressure on Hamas to accept the premises of the peace process? Or will the fashionable pressure for "engagement" with Hamas turn into an alibi for evading that necessity?

Are the moderate Arab states prepared to expand and strengthen the small group committed to genuine co-existence? Will recognition of Israel bring an end to the unrelenting media, governmental and educational campaign in Arab countries that presents Israel as an illegitimate, imperialist, almost criminal interloper in the region?

Several moderate Arab states have been extraordinarily reluctant to come to Annapolis. If they appear, will they treat their presence as their principal contribution for which one-sided pressure on Israel is deemed an appropriate concession?