Across Israel and the Palestinian territories last week, furies were unleashed–and then apparently checked, at least for a moment. Israel’s hawkish Prime Minister Ariel Sharon propelled the conflict into the heart of Palestinian cities, including Ramallah, Qalqilya and Tulkarem, sending in thousands of troops and hundreds of tanks and armored personnel carriers in a massive strike against Palestinian militants before the arrival of U.S. special envoy Anthony Zinni. The Palestinians lashed out, too, hitting Israeli targets whenever they found an opening. But after Zinni met separately with Sharon and Palestinian leader Yasir Arafat, there was guarded talk about holding a three-way negotiation aimed at establishing a ceasefire.

Already, the Israeli incursions had done immense damage. Sniper fire turned downtowns into deserted combat zones; terrified civilians huddled inside refugee camps as Israeli troops smeared with black and yellow camouflage paint blew down walls in a house-to-house search for guerrillas. Palestinian militants retaliated with a series of attacks that made a mockery of Sharon’s promises to deliver his people security through force. In Jerusalem, a suicide bomber killed 11 young Israelis at a popular cafe. In the Gaza Strip, a powerful mine destroyed a Merkeva tank and killed three Israeli soldiers, just 100 yards from the spot where another tank was blown up last month. As the death toll kept climbing–23 Israelis and 58 Palestinians killed in the space of a week–the conflict seemed to be spinning out of control.

Sharon’s assault distressed many U.S. officials. They said he delayed Zinni’s arrival for a week after the mission was announced, apparently to make time for one more offensive. The Americans were furious over what they regarded as excesses committed by Israeli troops, such as firing on ambulances, blocking access to Ramallah’s main hospital and preventing pregnant women from passing through military roadblocks. “You have to step back,” Secretary of State Colin Powell told Sharon by telephone. At the United Nations, the Bush administration pointedly sponsored a Security Council resolution calling, among other things, for the creation of a Palestinian state. At a news conference, President George W. Bush called Sharon’s action “unhelpful” to the cause of peace. Finally arriving in Israel last Thursday, Zinni demanded that Israel make good on an earlier pledge to withdraw all troops from Palestinian-controlled territory. Sharon quickly pulled some Israeli forces back, promising to withdraw the rest in a few days. But Israeli units continued to ring Palestinian cities and severely restricted movement in the West Bank and Gaza Strip.

Washington hoped to obtain a ceasefire before the arrival in Israel this week of Vice President Dick Cheney, whose effort to rally Arab support for a move against Iraq has been compromised by the worsening violence. Two weeks ago Sharon gave up one of his key demands, indicating he would negotiate with the Palestinians without insisting on an unbroken week of peace beforehand. And Arafat may have a real incentive to rein in his Fatah militants: the possibility of Israeli permission to attend next week’s Arab summit in Beirut, where Saudi Arabia plans to formally introduce its Mideast peace initiative.

If a ceasefire does take hold, as many as two dozen U.S. monitors will be sent in to investigate violations. But Palestinian leaders doubt any truce will last long. They say their people’s rage has been stoked by Israel’s latest assault. “There are 100,000 Palestinians willing to become kamikazes,” says Arafat’s top aide, Ahmed Qurie. “I’m afraid it’s too late for Zinni.”

Sharon’s Ramallah incursion took Israeli crackdowns to a new level. During the four-day operation, Sharon’s forces rounded up hundreds of suspected fighters, damaged dozens of homes and killed an Italian photojournalist with a burst of bullets from a tank. But Sharon’s plan may have backfired. Unlike previous incursions in Nablus and Gaza, in which dozens of militants were killed in fierce gun battles, most of the Palestinian fighters in Ramallah melted away, avoiding a fight with the Israelis. “The entire operation was nothing more than a temporary takeover of living rooms of frightened families, the destruction of kitchens, demolition of ambulances and the false arrests of hundreds of men,” wrote former Jerusalem deputy mayor Meron Benvenisti in the Israeli daily Ha’aretz. The move into Bethlehem achieved even less. Palestinian sources say 2,100 gunmen now operate freely in Bethlehem and surrounding villages; only eight were arrested in the Israeli sweep. “The attacks have wrecked [Arafat’s] Palestinian Authority, but they’ve strengthened the street,” says Khader Abu Abbara, a leader of the hard-line Popular Front for the Liberation of Palestine. “The militants have a strong will to continue the uprising, because we see no other options.”

Israelis are increasingly worried about retaliation. Private security guards now stand at the entrances to most gathering places, and police and soldiers search cars and frisk pedestrians on main shopping streets. In a single day last week, Israel’s Interior Ministry processed 1,500 gun-permit applications, the most since the intifada began.

Israeli public opinion has become even more divided than usual. The violence has reawakened the once-moribund peace movement, but it has also driven many Israelis farther to the right. According to opinion polls, most now believe Palestinians will never accept Israel’s existence. About 46 percent of Israelis favor expelling Palestinians from the occupied territories, according to a poll taken by the Jaffee Center for Strategic Studies. Support for the 1993 Oslo peace accords has dropped from 58 percent a year ago to 35 percent now, while fewer than half of all Israelis now support the establishment of a Palestinian state.

Is there a way back from the brink? The Saudi initiative, which calls for Israel’s withdrawal to its 1967 borders in exchange for recognition by the Arab world, could present the framework for real negotiations–though few expect the current Israeli leadership to seize the opportunity. “Sharon has no plan, no vision, except to survive politically,” says Gilad Sher, Israel’s chief negotiator at the Camp David talks in 2000. “On his own, he can’t reach a historic compromise.” Moderates hope the Saudi initiative will box Sharon into a corner, leading to the collapse of his coalition. But a new election could well produce a victory for Sharon’s rival in the Likud bloc, former prime minister Benjamin Netanyahu, an even more hawkish figure who believes the Israeli military should remove Arafat, crush the Palestinian Authority and conduct sweeps more intensive than the Ramallah raid.

Eventually, say veteran negotiators on both sides, a permanent settlement will be reached, approximating the model nearly agreed to at Camp David and the subsequent Taba talks: Israel’s pullback to its pre-June 1967 borders, swaps of territory to allow for the creation of several settlement blocs, Palestinian sovereignty over East Jerusalem, security guarantees for Israel and generous compensation for Arab refugees in lieu of a right of return. The question is how much blood will have to be shed before they get there. “Each side sees the other wrongly, as having created this terrible tragedy,” says Uri Savir, chief Israeli negotiator in Oslo and director of the Peres Center for Peace in Tel Aviv. “For us to move from suspicion to mutual trust requires a leadership that doesn’t exist.”

Until that leadership emerges, there may be more bloodletting. After ambulances brought the mangled corpses of the two Bethlehem collaborators to a hospital in the suburb of Beit Jala, a mob of Palestinians threatened to burn down the building if the bodies were admitted to the morgue. Hospital director Peter Qumri said he understood their anger. “The mortuary is for our martyrs,” he said. “I won’t spoil it by putting such bad bodies inside.” In the occupied territories these days, even the dead can’t rest in peace.