PM Olmert has responded to the Arab initiative (see my take on the Arab initiative here) by proposing a summit:
In his first public reaction to the Arab League summit’s relaunching of its 2002 peace initiative last week, Prime Minister Ehud Olmert on Sunday night invited the heads of the Arab states to a conference where these and other ideas would be discussed…
He said it was clear that each side would be able to bring its positions to such a meeting, alluding to Israel’s stance that the Arab peace initiative was a starting point for negotiations, not the finish line…
Olmert said there was a “significant gap” between the Israeli and Arab positions, but that “in a correct, responsible and careful process we can move forward toward negotiations.” — Jerusalem Post
It’s certain that the Arab leaders will not accept this. First, they see their proposal as too magnanimous already, since it gives lip service (albeit no more) to the continued existence of a state of Israel. So they feel that they have gone as far as they can, and now it’s up to Israel to accept the proposal or else (and I think the implication of the ‘or else’ is ultimately war).
Second, they will not accept any proposal that is an Israeli proposal, because to do so would be to admit that Israel is as much a legitimate nation as the Arab states. Their view of Israel is analagous to Israel’s view, for example, of Hamas: an entity so illegitimate that even to talk with it is out of the ordinary. To accept Israel’s proposal is to put themselves on the same level as Israel.
And third, they believe that Israel’s strategic position is weak after the Lebanon war, and her ally the US can be pressured because of the Iraq situation. Therefore they feel that she can be forced to accept their terms (and if not, nothing is lost).
Olmert’s initiative does have an important function, however. By presenting an alternative that no-one (except the Arab states) should see as unreasonable, Israel makes it clear that she is not the obstacle to peace in the region. Although it’s highly unlikely that anything will come of it, the statement that it makes needs to be emphasized. It’s also possible that Israel’s strategic position will improve, at which point it could provide a basis for real talks.
Update [2 APR 1015 PDT]:
[an anonymous] Saudi official told The Associated Press that “before any meeting could be considered,” Israel should accept the 2002 Arab peace initiative that would recognize Israel in exchange for withdrawal from captured territory and a just solution for the Palestinian refugees. — AP (Yahoo)