The United States is losing interest in the Middle East peace process and prospects of creating a viable Palestinian state are gradually disappearing as a result, a British government assessment of the Palestinian crisis warns.
The analysis, written by the Department for International Development (DfID) in consultation with the Foreign Office, reveals the alarm within Whitehall at the disengagement of the Bush administration from events in Israel and the occupied territories.
It warns: "The role of the USA, the country with the most leverage over Israel, is key. Frustration with aspects of the Palestinian leadership, preoccupations in Iraq, presidential elections and security concerns for US citizens may risk USA disengagement at the highest levels from the peace process when it is most likely to start collapsing."
The analysis, signed off by the development secretary, Hilary Benn, concludes: "There is now a medium to high probability that there will be a lack of effective international engagement on the Middle East peace process due to other international priorities in 2004." It says the EU has "limited influence."
Alarm at apparent US disengagement was also signalled on Capitol Hill yesterday, as senators mulled over the peace process stalemate and sudden Palestinian disarray.
Senator Joseph Biden said the administration's interest in galvanising peace efforts appeared to have drifted.
"The stakes are high," Mr Biden, a Democrat, said. "Yet I don't see a commensurate level of urgency, nor sustained and consistent involvement from the Bush administration."
"Benign neglect punctuated by episodic engagement imperils American strategic interests in the region," he added. "Where is American diplomacy? It is not as if we have the luxury of time."
America's top diplomat, Colin Powell, expressed last night a sense of impotence at the events in Gaza, saying: "We will just have to watch it unfold." He reiterated Washington's position that to move the peace process forward and address the current problems besetting the Palestinians, Mr Arafat needed to cede real power to a prime minister who could pick up negotiations with Israel. But he offered few new insights or initiatives.
Tony Blair has insisted that the peace process, along with Iraq, is a priority of his foreign policy and a key to winning support in the Arab world. Before the Iraq war, he told ministers and officials he was using his influence with Washington to convince the Bush administration to do more about the Middle East conflict.
But since the war, US action has been limited. Mr Blair tried to put the best gloss on the planned withdrawal from Gaza negotiated by Mr Bush and the Israeli prime minister, Ariel Sharon. He endorsed the plan, despite Palestinian condemnation, and has said the road map peace plan is not dead.
The DfID analysis says unilateral Israeli withdrawal from Gaza and parts of the West Bank not in line with the road map may lead to an increase in violence and severe poverty.
"Without action soon, there is a real danger that facts on the ground [Israeli settlement expansion and construction of a separation barrier] may make a viable two-state solution almost impossible."
It reports a substantial risk that the Palestinian Authority will collapse, but says the most likely scenario is "continuing failure to make progress towards a political solution" leading to the "continued construction of the separation barrier, and gradual disappearance of the prospects for creating a viable Palestinian state."
The report suggests a negotiated withdrawal by Israel could lead back to the road map and two-state solution.
But it adds: "The Palestinian state which would be left if Israel controlled all access and/ or permanently withdrew behind the current and planned route of the separation barrier would not be viable or stable."
Last night, the UN general assembly voted to demand that Israel comply with a world court ruling and remove it. Britain backed the resolution, the US opposed it.