debkafile Exclusive: Rice winds up her Middle East peace shuttle Wednesday empty-handed

The US Secretary of State Condoleezza Rice has been shuttling all week between Israel and the Palestinians, with a stopover in Cairo, in a bid to forge a joint document substantial enough to convene a Middle East conference in Maryland before the end of 2007.
She was warned by all the officials she encountered that no starting-point for final-status negotiations on a Palestinian state – and therefore no agreed document – was within reach: Israeli prime minister Ehud Olmert, Egyptian president Hosni Mubarak, Middle East Special Envoy Tony Blair and US diplomatic and military envoys working with the Palestinian Authority. The horizon for fulfilling the Bush vision of a two-state solution proved to be as distant as ever.
There was general agreement on all sides, according to debkafile‘s political sources, that Mahmoud Abbas and Salam Fayyad are incapable of solidifying their grip on power or combating Palestinian terror, as required by the Middle East road map.
The US Secretary also discovered that, notwithstanding his denials, Abbas is conducting secret indirect contacts with Hamas. Whatever the outcome of the Annapolis conference, if it goes ahead, he is determined to lead his Fatah party into negotiations with Hamas for a united national government and reconstruct the Gaza-West Bank link which was severed in June when Hamas drove the Fatah-dominated Palestinian Authority out of the Gaza Strip.
debkafile‘s Jerusalem sources report that top Israeli government levels and visiting US officials are deeply anxious lest the secretary of state’s decisions in the light of her setback generate a serious crisis in relations between the Bush administration and the Israeli government. Her last meetings were fixed for Wednesday afternoon with Olmert and foreign minister Tzipi Livni, leader of the Israeli negotiating team.
Sources familiar with the US Secretary’s schedule believe that in the next few hours she must decide how to present the outcome of her mission to President Bush. They see three options:
1. She can advise the president to postpone the international peace conference in Annapolis to a later date.
2. Or cancel the event in view mainly of the flat unwillingness of Arab rulers to put in an appearance in any circumstances. Washington will then have to decide whom to blame for the fiasco.
3. Rice may propose an American-authored document for presentation to the conference. This would be tantamount to imposing a settlement on Israel and the Palestinians, and be bound to produce a clash between the Bush administration and the Olmert government over the radical Israeli concessions required for bringing the Arab parties to the conference.