The guidelines of the Palestinian national unity government provide scant hope for peace in the Middle East. Israel appears in the guidelines only as an adjective; it modifies words such as occupation or aggression and never appears as a noun, much less a state to be recognised. The guidelines suggest a return to the pre-Oslo period when diplomacy was based on rejection and denial.

Yet the world and the Middle East have changed. While Iran, Hizbollah and Hamas reject Israel’s right to exist and challenge the premise of any peace process – a two-state solution – the Arab League is poised to reaffirm the Saudi initiative that offers full diplomatic ties to Israel following its withdrawal from all territories occupied in 1967. Here is validation that the Arab world still believes in peace with Israel.

Is this a basis to pursue the political goal that Condoleezza Rice, US secretary of state, has been promoting? It provides an opening. The principles need more grounding and a credible process to fulfil them. The League offers the Israelis peace, but only after Israel has taken all the steps the Arabs want.Conflicts are rarely solved by one side making all the concessions before it sees what it gets in return.

The League adopted the Saudi initiative in 2002, the day after the Park Hotel bombing in Israel. Thirty people were killed in what would be the first of six suicide bombings in six days in Israel. Even though the League was offering Israel full diplomatic relations once it withdrew from all territories, none of its representatives would condemn the bombings. In Israel, the reality of hatred, rejection and death trumped the abstract offer of peace. Today, with Hamas continuing to embody rejection, the Arab world must show that if Israel meets its terms (or something close to them), it will receive peace and security not as a slogan but as a reality.

After six years in which there has been no peace process and a dialogue only of violence, negotiations and tangible steps must fill the vacuum. At this point, a plan that lays out the final contours of an agreement is unachievable. No one is prepared to embrace the necessary compromises. Can Mahmoud Abbas, Palestinian Authority president, agree to accept a right of return for Palestinian refugees to his state but not to Israel? Can Ehud Olmert, Israel’s prime minister, accept Palestinian sovereignty in all the Arab neighbourhoods of East Jerusalem? Neither has the strength nor the inclination to do so.

Were Arab states prepared to embrace such compromises, they would provide Mr Abbas with political cover and Mr Olmert a political argument. Mr Abbas could declare that he has not conceded Palestinian rights but was following the Arab world’s lead in trying to settle the conflict. Mr Olmert could argue that since the Arab world has crossed historic thresholds, Israel must respond. But the League is only conceding Israel’s existence – useful, but hardly a breakthrough.

What can be done now? First, the US should broker a comprehensive ceasefire between Mr Olmert and Mr Abbas. In return for an end to attacks against Israelis and the cessation of Hamas’ smuggling and arms build-up, the Israelis would stop incursions, arrests and targeted killings. Mr Abbas would have to deliver Hamas and Hamas would have to enforce, not merely observe, the ceasefire.

Second, a political objective – discussed with Israelis, Palestinians and Arab leaders – should be pursued. It is necessary to create a sense of hope and show that the ceasefire is not an end in itself. There must be a political dimension that creates a pathway for Palestinians and Israelis alike. Israel should see how the Arab world will normalise relations with it even as Palestinians see what statehood will mean for them.

Third, there must be an effort to support those Palestinians committed to peace. Fatah must remake itself to compete with Hamas. Donors must work with reformers in Fatah or those independents who are determined to build the institutions that statehood requires. Hamas deserves no such help so long as it rejects the basic conditions for peacemaking. No ceasefire or political objective will be sustainable if Fatah does not become competitive internally. The more competitive it is, the more likely Hamas will be forced to transform itself or fail.

While the prospects for peace in the near term are not high, there is room for a plan that ties near-term calm to a political process between Arabs and Israelis and serious support for reform among Palestinians.

The writer is counsellor at the Washington Institute for Near East policy. He is former US envoy to the Middle East and author of The Missing Peace