PALO ALTO, Calif. -- The European Union is increasingly showing a new independent stance on foreign-policy issues as the logic of its industrial and economic integration plays out in the international arena.

Already the EU has taken a distinct and independent approach to both the Israel-Palestinian conflict and the nuclear crisis in Iran. Now it has broken ranks over the Korean Peninsula, fed up and concerned with the failure to resolve the ongoing crisis over North Korea's development of nuclear arms.

Reflecting this new stance, the European Parliament this week passed a comprehensive resolution on the Nonproliferation Treaty (NPT) and nuclear arms in North Korea and Iran:

• It urges the resumption of the supply of heavy fuel oil (HFO) to North Korea in exchange for a verified freeze of the Yongbyong heavy-water reactor, which is capable of producing weapons-grade plutonium, to avoid a further deterioration in the situation. At the same time it is calling for the European Council and Commission to offer to pay for these HFO supplies.
• It urges the Council of Ministers to reconsider paying 4 million Euros of the suspension costs for KEDO (the Korea Energy Development Organization) to South Korea to ensure the continued existence of an organization that could play a key role in delivering energy supplies during a settlement process.
• It demands that the Commission and Council request EU participation in future six-party talks, making it clear that the EU will in the future adopt a "no say, no pay" principle in respect to the Korean Peninsula. Having already placed more than $650 million worth of humanitarian and development aid into the North, it is no longer willing to be seen merely as a cash cow. This view was backed in the debate by the Luxembourg presidency and follows a line initially enunciated by Javier Solana's representatives last month in the Parliament's Foreign Affairs Committee.
• It urges North Korea to rejoin the NPT, return to the six-party talks and allow the resumption of negotiations.

The EP cannot substantiate U.S. allegations that North Korea has an HEU (highly enriched uranium) program or that North Korea provided HEU to Libya. It has called for its Foreign Affairs Committee to hold a public hearing to evaluate the evidence. "Once bitten, twice shy" is the consequence of U.S. claims that Iraq possessed weapons of mass destruction.

The world order is changing; the EU -- like China -- is emerging as a significant global power economically with the euro challenging the dollar as the global currency (even prior to the latest enlargement from 15 to 25 member states, the EU's economy was bigger than that of the United States). Speaking at Stanford University earlier this month, former U.S. foreign policy adviser Zbigniew Brzezinski pointed out that the EU, U.S., China, Japan and India will be the major powers in the new emerging global order. Since the new Asia will have three out of the five major players, he stressed the importance of engaging with it.

How will those already in play respond? Some may claim that statements by North Korea welcoming the EU's involvement and participation are merely polite, inoffensive small talk that cannot be taken seriously. Yet there have been a spate of pro-EU articles appearing in Rodong Sinmun, the daily newspaper of the Central Committee of the Korean Workers Party, since 2001.

Of 128 EU-related articles between 2001 and 2004, a majority praised Europe's independent counter-U.S. stance, emphasized its increasing economic power and influence, and heralded its autonomous regional integration. Rodong Sinmun portrays the EU as the only superpower that can check and balance U.S. hegemony and America's unilateral exercise of military power.

North Korea's perception of the EU is well reflected in articles such as: "EU becomes new challenge to U.S. unilateralism"; "Escalating frictions (disagreements) between Europe and U.S."; "European economy (euro) dominating that of the U.S."; "Europe strongly opposing unilateral power play of U.S.," and so forth.

Concurrently, North Korea has pursued active engagement with the EU by establishing diplomatic relations with 24 of the 25 EU member states (the exception being France). It is not necessary to read between the lines to recognize North Korea's genuine commitment to engagement with the EU based on its perception of the EU's emerging role on the world stage.

The Republic of Korea has publicly welcomed the prospect of EU involvement, while China wishes to go further and engage in bilateral discussions with the EU on its new policy toward the North. Russia will follow the majority. The problem is with Japan and the U.S.

In Japan, opinion is split by hardliners in the Liberal Democratic Party who view problems with North Korea as a convenient excuse to justify the abandonment of the Peace Constitution. They don't want a quick solution until crisis has catalyzed the transformation of Japan into what advocates call a "normal" country.

The U.S. expects an EU financial commitment, but not EU participation. The neocons believe that EU participation would change the balance of forces within the talks inexorably toward critical engagement rather than confrontation.

The question is whether the EU's offer will point the U.S. into a corner or trigger a breakthrough. Will U.S. fundamentalists outmaneuver the realists who favor a diplomatic rather than military solution? Only time will tell.

Glyn Ford, a Labour Party member of the European Parliament (representing South West England), belongs to the EP's Korean Peninsula Delegation. Soyoung Kwon is a postdoctoral fellow at Stanford University's Asia-Pacific Research Center.

Chris Farrell: Remember the dot-com boom of the 1990s? It seemed as if every entrepreneur with a good idea and a PC could challenge established companies for customers. Brick-and-mortar companies jumped on the e-commerce bandwagon. The demand for digital workers soared. Long-time computer professionals hopped from job to job, pulling down more money with every employer. Newly minted college graduates juggled multiple job offers. But when the Y2K problem emerged in the latter part of the '90s business and government quickly realized there still weren't enough IT workers on hand to find and repair the computer glitch. The quick fix? Hire computer professionals overseas. And that temporary solution permanently changed the global economy.

Paul Saffo: Y2K was huge in getting the ball rolling on offshoring.

Farrell: Paul Saffo is director of the Institute for the Future, a high-tech think tank in Silicon Valley.

Saffo: But once they went overseas, they discovered it's not just a matter of cost. These programmers overseas are often better than the best you can get in the United States.

Farrell: Ireland, the Philippines, and Israel were among the more popular destinations for offshoring Y2K programming fixes. But India became the offshore capital. It had plenty of high-tech companies staffed with well-educated English speaking digital workers. Thanks to India's steep import barriers in the 1980s, no one could afford new computer systems. So Indian tech workers were the world's leading experts in the older software languages that needed upgrading. Suhas Patil is chairman emeritus of semiconductor maker Cirrus Logic.

Suhas Patil: And they were listening to their customers and what their needs were, and as the recognition came that systems had to be upgraded to not have the problem based on the Y2K issues, that's how they got their break.

Farrell: And made the most of the opportunity. AnnaLee Saxenian is Dean of the School of Information Management and Systems at the University of California, Berkeley.

AnnaLee Saxenian: I think the importance of Y2K was overwhelmingly about establishing Indian companies' reputation among US customers and helping begin a set of customer supplier relationships that have simply taken off in the last four years.

Farrell: Of course, Y2K contracts ended in 2000. Yet many Indian companies took advantage of their now sterling programming reputations to negotiate for more sophisticated work. Research. Software development. Accounting services. Long-distance medical advice. Rafiq Dossani is a senior research scholar at Stanford University.

Rafiq Dossani: India is now growing at 70-80 per cent a year in offshored services ... services which are maintaining an accounting system, maintaining an HR system, doing claims processing, that's growing easily at 70 per cent, maybe even higher.

Farrell: Offshore also came onshore during Y2K. The town of Mountain View lies at the heart of California's Silicon Valley. Housed in one of the many nondescript low-rise office buildings that crowd the region's business avenues is the Indus Entrepreneur, or TIE. It is a networking base for the Indian high-tech Diaspora.

Shankar Muniyappa: Y2K was a big opening as early as 98.

Farrell: Shankar Muniyappa is director of information systems for TIE. He came to America for Y2K-and stayed.

Muniyappa: Myself and many of us believe still believe this is the place where you need to be if you want to be middle of innovation.

Farrell: Some 30,000 Indian IT professionals now live and work in the Valley. Rafiq Dossani of Stanford University:

Dossani: At least 25 per cent of the start ups have Indian employees at fairly senior levels working for them. And ... there's a whole infrastructure therefore being built around them because it's a substantial number now, so you see shopping malls you see business services and so on catering to this particular immigrant community.

Farrell: That community is adding vitality to the American economy. Still, many American high-tech workers are threatened by the offshoring of white collar jobs. The numbers are murky, but according to Mark Zandi of Economy.com 370,000 non-manufacturing jobs moved overseas over the past fours years-with most of the information technology jobs going to India. Salaries are down too. Still, the big factor behind the loss of 1.5 million jobs lost since Y2K is improved business efficiency or productivity - not offshoring. And Y2K also played an important role in boosting business efficiency.

Economists initially looked at Y2K as a productivity killer.

Imagine a town threatened by a rising river. Every able-bodied person in town is put to work stacking sandbags. It's necessary work to save the town - but it's unproductive work. Nothing gets built. No food gets grown.

With the Y2K bug, programmers, chief information officers, project managers, and other digital workers were getting paid to do unproductive work - stacking sandbags of silicon. No innovative investments. No new productivity enhancing software.

But economists were wrong. Y2K wasn't a flood. Instead, think of it as clearing a path choked with underbrush. Once the trail is open, it is much easier to zip from point A to point B. Y2K gave companies an excuse to clean up their software and hardware underbrush - a critical factor in today's improved business productivity. Paul Saffo:

Saffo: A lot of companies said well, gosh, if we're going to have to spend all this money to fix our software let's also see what else we can do at the same time, so it was an invitation to replace a whole bunch of stuff. ... So it forced people to ask hard questions about how they were using things and in the best instances people really did become more efficient.

Farrell: The result? Companies used the new systems they installed to cut costs and work smarter - and hire fewer workers.

[Voice of Leonard Nimoy: "Do you have hard copies of all your important documents ... such as bank statements."]

That's Leonard Nimoy, Mr. Spock from Star Trek. He's narrating the Y2K Family Survival Guide video - one of thousands of products peddled by prophets of doom. Y2K did bring home how reliant we all are on computers. Many of us still don't back up critical data at home. The same isn't true for business and government. Many learned from Y2K just how vulnerable information systems are to a malicious attack or unforeseen disaster. Case in point: Y2K actually helped some businesses survive 9/11.

[News broadcast of President George W. Bush: "I've directed the full resources of intelligence and law enforcement communities to find those responsible and bring them to justice."]

The attack on the World Trade Center stopped trading on the New York Stock Exchange. Against the odds, that citadel of capitalism opened six days later.

John Koskinen: The reason the markets, securities markets, were able to open the Monday after the Tuesday of 9-11 was they still had the test scripts that had been developed in 1998 and 99.

Farrell: John Koskinen credits preparations for Y2K. He was President Clinton's Y2K czar.

Koskinen: ... they were able to in effect take all of those Y2K scripts and make sure that all the transactions with all of the major players would close. Without that they never would have been able to do it in the time frame with the confidence they had.

Farrell: A record 2.4 billion shares traded on the New York Stock Exchange the day it reopened.

Y2K was a unique economic event. Earlier jolts to the economy, like the 1973 oil price hike and the 2001 attack of 9/11, were shocks. But the Year 2000 arrived right on schedule. The surprise was how little immediate impact the much-feared transition had on the economy. Yet we're still living and working with the economic impact of Y2K five years later.

For Marketplace and American RadioWorks, I'm Chris Farrell.

While the improving U.S. economy remains the engine of growth for the world economy, an underlying trend involving "huge imbalances and risks" should be cause for serious alarm, Paul Volcker warned Feb. 11 during a speech on campus. Americans have virtually no savings, the former chairman of the Federal Reserve said, and the nation is consuming more than it is producing. Furthermore, Social Security and Medicare are threatened by the retirement of millions of baby boomers and skyrocketing health care costs. More broadly, he continued, the world economy is lopsided.

"Altogether, the circumstances seem as dangerous and intractable as I can remember," Volcker said during a keynote address at the second annual summit of the Stanford Institute for Economic Policy Research. "But no one is willing to understand [this] and do anything about it."

Volcker spoke at the end of a daylong conference that attracted about 450 corporate leaders, entrepreneurs, policymakers and academics. The event included discussions on the stability of the global economy, the U.S. economic outlook and the role of the Internet in helping to level the competitive playing field worldwide. The conference also featured sessions on outsourcing, Medicaid and Medicare, technology policy and the Sarbanes-Oxley Act, which was implemented in 2002 to restore investor confidence in corporate America following a series of bankruptcies and far-reaching accounting scandals.

During a morning session, William J. Perry, a former secretary of defense and a senior fellow at the Stanford Institute for International Studies, gave a chillingly stark assessment of the crisis of terrorism that was reinforced by George Shultz, a former secretary of state.

"I fear that we're headed toward an unprecedented catastrophe where a nuclear bomb is detonated in an American city," Perry said. "The bomb will not come in a missile at the hands of a hostile nation. It will come in a truck or a freighter at the hands of a terror group."

Perry, who holds the Michael and Barbara Berberian Professorship, said the "awesome military capability" of the United States has had unintended consequences in that it has increased the incentive for a hostile power, unable to compete in conventional warfare, to acquire weapons of mass destruction and launch terror attacks against America. U.S. military superiority is not particularly effective against such tactics, he said. "There exist terror groups, of which al Qaeda is the most prominent, that have the mission, the intent to kill Americans," Perry said. "They have the capability to do so; they have the resources to do so." A truly nightmare scenario would involve a terror group using nuclear weapons acquired clandestinely, he said: "After 9/11 that threat seems all too real."

Such a catastrophe is preventable, but the United States is not taking the necessary measures to avert it, Perry warned. Important steps should include a major expansion of the Nunn-Lugar Cooperative Threat Reduction Program with the support the G-8 group of industrialized nations. The program was created in 1991 to reduce the threat posed by the legacy of the Soviet nuclear arsenal and succeeded in dismantling and destroying weapons in Kazakhstan, Ukraine and Belarus. Furthermore, Perry said, a clear strategy of "coercive diplomacy" should be used against North Korea and Iran, followed by a major diplomatic initiative to convince other nuclear powers that the threats posed by terrorists are real and not just directed at Americans. "While America must show real leadership in dealing with this problem, [it] cannot deal with it alone," he said.

Shultz, the Thomas W. and Susan B. Ford Distinguished Fellow at the Hoover Institution, said the United States faces a huge problem in combating Islamic radicals intent on using terror to achieve their goals. "Eventually, what they want is to change the way the world works by creating a unified Islamic theocratic state," he said. "It's a worldwide agenda."

Shultz argued that the United States must help supporters of mainstream Islam understand the fundamental nature of the problem so they will take action against the radicals themselves.

"That's why Iraq is of such overwhelming importance," he said. "Here we have a country in the heart of the Middle East where there is a chance. If Iraq can emerge as a sensibly governed country--that's a gigantic event in the Middle East and in this war on terror. Our enemies recognize that just as well as we do, and that's why we're having so many problems."

Other measures that Shultz said should receive greater support include efforts to set up independent media in countries such as Iraq, as well as a revival and expansion of the U.S. diplomatic service, which he said was allowed to atrophy after the end of the Cold War. "We have developed an awesome military capability," he said. "We need a diplomatic capability that is as every bit as good." Shultz also stressed the need to reduce U.S. dependence on foreign oil. "We are out of our cotton-picking minds not to be doing much, much more to figure out how to use much, much less oil," he said to applause from the audience.

In the afternoon, Thomas Friedman, a columnist at the New York Times, also called for greater efforts to develop alternative energy supplies. This should be the "moon shot of our generation," he said.

Friedman discussed how the convergence of personal computers, cheap telecommunication and workflow software has changed the way the world works. In his upcoming book, The World Is Flat: A Brief History of the 21st Century, Friedman explained that the world has shrunk to the point where individuals, not countries or companies, are increasingly able to think and act globally. "And it's not just a bunch of white Westerners," he said. "It's going to be driven by individuals of every color of the rainbow."

Friedman told the audience that these technological advances quietly unfolded just as the 9/11 terror attacks, the Enron collapse and the dot-com bust grabbed America's attention. "People thought globalization was over but actually it turbo-charged globalization; it drove it overseas," he said. "9/11 completely distracted our administration, and then there was Enron. We have hit a fundamentally transformative moment and no one is talking."

In this new scenario, people anywhere in the world will be able to "innovate and not emigrate" if they have the required skills, Friedman said. This means that engineers in India and China will be able to compete on a level playing field with people in this country. "When the world goes flat, everything changes," he said.

To address this challenge, Friedman said the United States must radically improve science, mathematics and engineering education and encourage young people to enter these fields. "We're not doing that," he said. "In the next two years, five years, it won't matter. In 15 years, which is the time it takes to build an engineer, it will matter. We will not be able to sustain our standard of living."

Since World War II, no state has suffered so cruel a reversal of fortunes as Israel. Admired all the way into the 1970s as the state of "those plucky Jews" who survived against all odds and made democracy and the desert bloom in a climate hostile to both liberty and greenery, Israel has become the target of creeping delegitimization. The denigration comes in two guises. The first, the soft version, blames Israel first and most for whatever ails the Middle East, and for having corrupted U.S. foreign policy. It is the standard fare of editorials around the world, not to mention the sheer venom oozing from the pages of the Arab-Islamic press. The more recent hard version zeroes in on Israel's very existence. According to this dispensation, it is Israel as such, and not its behavior, that lies at the root of troubles in the Middle East. Hence the "statocidal" conclusion that Israel's birth, midwifed by both the United States and the Soviet Union in 1948, was a grievous mistake, grandiose and worthy as it may have been bat the time.

The soft version is familiar enough. One motif is the "wagging the dog" theory. Thus, in the United States, the "Jewish lobby" and a cabal of neoconservatives have bamboozled the Bush administration into a mindless pro-Israel policy inimical to the national interest. This view attributes, as has happened so often in history, too much clout to the Jews. And behind this charge lurks a more general one-that it is somehow antidemocratic for subnational groups to throw themselves into the hurly-burly of politics when it comes to foreign policy. But let us count the ways in which subnational entities battle over the national interest: unions and corporations clamor for tariffs and tax loopholes; nongovernmental organizations agitate for humanitarian intervention; and Cuban Americans keep us from smoking cheroots from the Vuelta Abajo. In previous years, Poles militated in favor of Solidarity, African Americans against Apartheid South Africa, and Latvians against the Soviet Union. In other words, the democratic melee has never stopped at the water's edge.

Another soft version is the "root-cause" theory in its many variations.

Because the "obstinate" and "recalcitrant" Israelis are the main culprits, they must be punished and pushed back for the sake of peace. "Put pressure on Israel"; "cut economic and military aid"; "serve them notice that we will not condone their brutalities"-these have been the boilerplate homilies, indeed the obsessions, of the chattering classes and the foreign-office establishment for decades. Yet, as Sigmund Freud reminded us, obsessions tend to spread. And so there are ever more creative addenda to the well-wrought root-cause theory. Anatol Lieven of the Carnegie Endowment for International Peace argues that what is happening between Israelis and Palestinians is a "tremendous obstacle to democratization because it inflames all the worst, most regressive aspects of Arab nationalism and Arab culture." In other words, the conflict drives the pathology, and not the other way around-which is like the streetfighter explaining to the police: "It all started when this guy hit back."

The problem with this root cause argument is threefold: It blurs, if not reverses, cause and effect. It ignores a myriad of conflicts unrelated to Israel. And it absolves the Arabs of culpability, shifting the blame to you know whom. If one believes former U.N. weapons inspector Scott Ritter, the Arab-Islamic quest for weapons of mass destruction, and by extension the war against Iraq, are also Made in Israel. "[A]s long as Israel has nuclear weapons," Ritter opines, "it has chosen to take a path that is inherently confrontational....Now the Arab countries, the Muslim world, is not about to sit back and let this happen, so they will seek their own deterrent. We saw this in Iraq, not only with a nuclear deterrent but also with a biological weapons deterrent...that the Iraqis were developing to offset the Israeli nuclear superiority."

This theory would be engaging if it did not collide with some inconvenient facts. Iraqis didn't use their weapons of mass destruction against the Israeli usurper but against fellow Muslims during the Iran-Iraq War, and against fellow Iraqis in the poison-gas attack against Kurds in Halabja in 1988-neither of whom were brandishing any nuclear weapons. As for the Iraqi nuclear program, we now have the "Duelfer Report," based on the debriefing of Iraqi regime loyalists, which concluded: "Iran was the preeminent motivator of this policy. All senior-level Iraqi officials considered Iran to be Iraq's principal enemy in the region. The wish to balance Israel and acquire status and influence in the Arab world were also considerations, but secondary."

Now to the hard version. Ever so subtly, a more baleful tone slips into this narrative: Israel is not merely an unruly neighbor but an unwelcome intruder. Still timidly uttered outside the Arab world, this version's proponents in the West bestride the stage as truth sayers who dare to defy taboo. Thus, the British writer A.N. Wilson declares that he has reluctantly come to the conclusion that Israel, through its own actions, has proven it does not have the right to exist. And, following Sept. 11, 2001, Brazilian scholar Jose Arthur Giannotti said: "Let us agree that the history of the Middle East would be entirely different without the State of Israel, which opened a wound between Islam and the West. Can you get rid of Muslim terrorism without getting rid of this wound which is the source of the frustration of potential terrorists?"

The very idea of a Jewish state is an "anachronism," argues Tony Judt, a professor and director of the Remarque Institute at New York University. It resembles a "late-nineteenth-century separatist project" that has "no place" in this wondrous new world moving toward the teleological perfection of multiethnic and multicultural togetherness bound together by international law. The time has come to "think the unthinkable," hence, to ditch this Jewish state for a binational one, guaranteed, of course, by international force.

So let us assume that Israel is an anachronism and a historical mistake without which the Arab-Islamic world stretching from Algeria to Egypt, from Syria to Pakistan, would be a far happier place, above all because the original sin, the establishment of Israel, never would have been committed. Then let's move from the past to the present, pretending that we could wave a mighty magic wand, and "poof," Israel disappears from the map.

Civilization of Clashes

Let us start the what-if procession in 1948, when Israel was born in war.

Would stillbirth have nipped the Palestinian problem in the bud? Not quite. Egypt, Transjordan (now Jordan), Syria, Iraq, and Lebanon marched on Haifa and Tel Aviv not to liberate Palestine, but to grab it. The invasion was a textbook competitive power play by neighboring states intent on acquiring territory for themselves. If they had been victorious, a Palestinian state would not have emerged, and there still would have been plenty of refugees. (Recall that half the population of Kuwait fled Iraqi dictator Saddam Hussein's "liberation" of that country in 1990.) Indeed, assuming that Palestinian nationalism had awakened when it did in the late 1960s and 1970s, the Palestinians might now be dispatching suicide bombers to Egypt, Syria, and elsewhere.

Let us imagine Israel had disappeared in 1967, instead of occupying the West Bank and the Gaza Strip, which were held, respectively, by Jordan's King Hussein and Egypt's President Gamal Abdel Nasser. Would they have relinquished their possessions to Palestinian leader Yasir Arafat and thrown in Haifa and Tel Aviv for good measure? Not likely. The two potentates, enemies in all but name, were united only by their common hatred and fear of Arafat, the founder of Fatah (the Palestine National Liberation Movement) and rightly suspected of plotting against Arab regimes. In short, the "root cause" of Palestinian statelessness would have persisted, even in Israel's absence.

Let us finally assume, through a thought experiment, that Israel goes "poof" today. How would this development affect the political pathologies of the Middle East? Only those who think the Palestinian issue is at the core of the Middle East conflict would lightly predict a happy career for this most dysfunctional region once Israel vanishes. For there is no such thing as "the" conflict. A quick count reveals five ways in which the region's fortunes would remain stunted-or worse:

States vs. States Israel's elimination from the regional balance would hardly bolster intra-Arab amity. The retraction of the colonial powers, Britain and France, in the mid-20th century left behind a bunch of young Arab states seeking to redraw the map of the region. From the very beginning, Syria laid claim to Lebanon. In 1970, only the Israeli military deterred Damascus from invading Jordan under the pretext of supporting a Palestinian uprising. Throughout the 1950s and 1960s, Nasser's Egypt proclaimed itself the avatar of pan-Arabism, intervening in Yemen during the 1960s. Nasser's successor, President Anwar Sadat, was embroiled in on-and-off clashes with Libya throughout the late 1970s. Syria marched into Lebanon in 1976 and then effectively annexed the country 15 years later, and Iraq launched two wars against fellow Muslim states: Iran in 1980, Kuwait in 1990. The war against Iran was the longest conventional war of the 20th century. None of these conflicts is related to the Israeli-Palestinian one. Indeed, Israel's disappearance would only liberate military assets for use in such internal rivalries.

Believers vs. Believers: Those who think that the Middle East conflict is a "Muslim-Jewish thing" had better take a closer look at the score card: 14 years of sectarian bloodshed in Lebanon; Saddam's campaign of extinction against the Shia in the aftermath of the first Gulf War; Syria's massacre of 20,000 people in the Muslim Brotherhood stronghold of Hama in 1982; and terrorist violence against Egyptian Christians in the 1990s. Add to this tally intraconfessional oppression, such as in Saudi Arabia, where the fundamentalist Wahhabi sect wields the truncheon of state power to inflict its dour lifestyle on the less devout.

Ideologies vs. Ideologies: Zionism is not the only "ism" in the region, which is rife with competing ideologies. Even though the Baathist parties in Syria and Iraq sprang from the same fascist European roots, both have vied for precedence in the Middle East. Nasser wielded pan-Arabism-cumsocialism against the Arab nation-state. And both Baathists and Nasserites have opposed the monarchies, such as in Jordan. Khomeinist Iran and Wahhabite Saudi Arabia remain mortal enemies. What is the connection to the Arab-Israeli conflict? Nil, with the exception of Hamas, a terror army of the faithful once supported by Israel as a rival to the Palestine Liberation Organization and now responsible for many suicide bombings in Israel. But will Hamas disband once Israel is gone? Hardly Hamas has bigger ambitions than eliminating the "Zionist entity." The organization seeks nothing less than a unified Arab state under a regime of God.

Reactionary Utopia vs. Modernity: A common enmity toward Israel is the only thing that prevents Arab modernizers and traditionalists from tearing their societies apart. Fundamentalists vie against secularists and reformist Muslims for the fusion of mosque and state under the green flag of the Prophet. And a barely concealed class struggle pits a minuscule bourgeoisie and millions of unemployed young men against the power structure, usually a form of statist cronyism that controls the means of production. Far from creating tensions, Israel actually contains the antagonisms in the world around it.

Regimes vs. Peoples: The existence of Israel cannot explain the breadth and depth of the Mukhabarat states (secret police states) throughout the Middle East. With the exceptions of Jordan, Morocco, and the Gulf sheikdoms, which gingerly practice an enlightened monarchism, all Arab countries (plus Iran and Pakistan) are but variations of despotism-from the dynastic dictatorship of Syria to the authoritarianism of Egypt. Intranational strife in Algeria has killed nearly 100,000, with no letup in sight. Saddam's victims are said to number 300,000. After the Khomeinists took power in 1979, Iran was embroiled not only in the Iran-Iraq War but also in barely contained civil unrest into the 1980s. Pakistan is an explosion waiting to happen. Ruthless suppression is the price of stability in this region.

Again, it would take a florid imagination to surmise that factoring Israel out of the Middle East equation would produce liberal democracy in the region. It might be plausible to argue that the dialectic of enmity somehow favors dictatorship in "frontline states" such as Egypt and Syria-governments that invoke the proximity of the "Zionist threat" as a pretext to suppress dissent. But how then to explain the mayhem in faraway Algeria, the bizarre cult-of-personality regime in Libya, the pious kleptocracy of Saudi Arabia, the clerical despotism of Iran, or democracy's enduring failure to take root in Pakistan? Did Israel somehow cause the various putsches that produced the republic of fear in Iraq? If Jordan, the state sharing the longest border with Israel, can experiment with constitutional monarchy, why not Syria?

It won't do to lay the democracy and development deficits of the Arab world on the doorstep of the Jewish state. Israel is a pretext, not a cause, and therefore its dispatch will not heal the self-inflicted wounds of the Arab-Islamic world. Nor will the mild version of "statocide," a binational state, do the trick-not in view of the "civilization of clashes" (to borrow a term from British historian Niall Ferguson) that is the hallmark of Arab political culture. The mortal struggle between Israelis and Palestinians would simply shift from the outside to the inside.

My Enemy, Myself

Can anybody proclaim in good conscience that these dysfunctionalities of the Arab world would vanish along with Israel? Two U.N. "Arab Human Development Reports," written by Arab authors, say no. The calamities are homemade. Stagnation and hopelessness have three root causes. The first is lack of freedom. The United Nations cites the persistence of absolute autocracies, bogus elections, judiciaries beholden to executives, and constraints on civil society. Freedom of expression and association are also sharply limited. The second root cause is lack of knowledge: Sixty-five million adults are illiterate, and some 10 million children have no schooling at all. As such, the Arab world is dropping ever further behind in scientific research and the development of information technology. Third, female participation in political and economic life is the lowest in the world. Economic growth will continue to lag as long as the potential of half the population remains largely untapped.

Will all of this right itself when that Judeo-Western insult to Arab pride finally vanishes? Will the millions of unemployed and bored young men, cannon fodder for the terrorists, vanish as well-along with one-party rule, corruption, and closed economies? This notion makes sense only if one cherishes single-cause explanations or, worse, harbors a particular animus against the Jewish state and its refusal to behave like Sweden.(Come to think of it, Sweden would not be Sweden either if it lived in the Hobbesian world of the Middle East.)

Finally, the most popular what-if issue of them all: Would the Islamic world hate the United States less if Israel vanished? Like all what-if queries, this one, too, admits only suggestive evidence. To begin, the notion that 5 million Jews are solely responsible for the rage of 1 billion or so Muslims cannot carry the weight assigned to it. Second, Arab-Islamic hatreds of the United States preceded the conquest of the West Bank and Gaza. Recall the loathing left behind by the U.S.-managed coup that restored the shah's rule in Tehran in 1953, or the U.S. intervention in Lebanon in 1958. As soon as Britain and France left the Middle East, the United States became the dominant power and the No. 1 target. Another bit of suggestive evidence is that the fiercest (unofficial) anti-Americanism emanates from Washington's self-styled allies in the Arab Middle East, Egypt and Saudi Arabia. Is this situation because of Israel-or because it is so convenient for these regimes to "busy giddy minds with foreign quarrels" (as Shakespeare's Henry IV put it) to distract their populations from their dependence on the "Great Satan"?

Take the Cairo Declaration against "U.S. hegemony," endorsed by 400 delegates from across the Middle East and the West in December 2002. The lengthy indictment mentions Palestine only peripherally. The central condemnation, uttered in profuse variation, targets the United States for monopolizing power "within the framework of capitalist globalization," for reinstating "colonialism," and for blocking the "emergence of forces that would shift the balance of power toward multi-polarity." In short, Global America is responsible for all the afflictions of the Arab world, with Israel coming in a distant second.

This familiar tale has an ironic twist: One of the key signers is Nader Fergany, lead author of the 2002 U.N. Arab Human Development Report. So even those who confess to the internal failures of the Arab world end up blaming "the Other." Given the enormity of the indictment, ditching Israel will not absolve the United States. Iran's Khomeinists have it right, so to speak, when they denounce America as the "Great Satan" and Israel only as the "Little Satan," a handmaiden of U.S. power. What really riles America-haters in the Middle East is Washington's intrusion into their affairs, be it for reasons of oil, terrorism, or weapons of mass destruction. This fact is why Osama bin Laden, having attached himself to the Palestinian cause only as an afterthought, calls the Americans the new crusaders, and the Jews their imperialist stand-ins.

None of this is to argue in favor of Israel's continued occupation of the West Bank and Gaza, nor to excuse the cruel hardship it imposes on the Palestinians, which is pernicious, even for Israel's own soul. But as this analysis suggests, the real source of Arab angst is the West as a palpable symbol of misery and an irresistible target of what noted Middle East scholar Fouad Ajami has called "Arab rage." The puzzle is why so many Westerners, like those who signed the Cairo Declaration, believe otherwise. Is this anti-Semitism, as so many Jews are quick to suspect? No, but denying Israel's legitimacy bears an uncanny resemblance to some central features of this darkest of creeds. Accordingly, the Jews are omnipotent, ubiquitous, and thus responsible for the evils of the world.

Today, Israel finds itself in an analogous position, either as handmaiden or manipulator of U.S. might. The soft version sighs: "If only Israel were more reasonable..." The semihard version demands that "the United States pull the rug out from under Israel" to impose the pliancy that comes from impotence. And the hard-hard version dreams about salvation springing from Israel's disappearance.

Why, sure-if it weren't for that old joke from Israel's War of Independence: While the bullets were whistling overhead and the two Jews in their foxhole were running out of rounds, one griped, "If the Brits had to give us a country not their own, why couldn't they have given us Switzerland?" Alas, Israel is just a strip of land in the world's most noxious neighborhood, and the cleanup hasn't even begun.

Earlier this month, the so-called EU Three--Britain, France and Germany-- achieved an important victory for global security, convincing Iran to suspend its uranium enrichment and plutonium reprocessing activities pending further negotiation on its nuclear question. Though Iran claims that it does not desire a nuclear bomb, the West has long been skeptical of the oil-rich state's contention that it seeks a nuclear fuel cycle for energy purposes alone. Europe and the United States (and of course Israel) will sleep better knowing that Tehran is not pursuing enrichment activities, whatever their alleged purpose.

But the EU3 agreement, which fails to discuss consequences for Iran if it breaks the deal, is vulnerable to being undermined not only by Iran but also by the United States; both have already raised eyebrows in the wake of the accord. Iran raced to produce uranium hexafluoride, a gas that can be enriched into bomb fuel, before it began to observe the temporary suspension on Monday. And both President George W. Bush and outgoing Secretary of State Colin Powell have publicly aired their suspicions that Iran will continue its drive for nuclear weapons under cover of the deal.

At the moment, administration hawks are pressing to confront the mullahs at the United Nations Security Council, where economic sanctions could be considered; calls for using force and for regime change are likely to follow.

Military action is inadvisable at this point, because of a dearth of solid intelligence and the secretive, geographically diffuse nature of Iran's nuclear sites. If the issue reaches the Security Council with the United States and Europe continuing along divergent paths, the inevitable deadlock will deal a severe and lasting blow to international security. Therefore, the agreement must be fortified to keep the Iranians honest, the Europeans effectively engaged and the U.S. hawks bridled.

This can be achieved through a U.S.-European accord laying out trigger mechanisms for specified consequences if Iran violates certain benchmarks. For example, if Iran fails to allow inspectors the access accorded by the Nuclear Nonproliferation Treaty's additional protocol--which Iran is provisionally observing pending ratification--or resumes enrichment and centrifuge-building activities, it could face severe economic sanctions, censure by the Security Council (necessitating cooperation from Russia and China), or in the event of hostility, a forceful response.

We don't know yet whether Tehran will play by the rules. The regime has mastered the art of behaving badly and then seeking rewards for getting back into line. To date, the Europeans have played into its hands, offering carrots for compliance without wielding sticks to punish violations.

Therefore, the Bush administration's apparent comfort with a military option can serve as an important deterrent against Iranian cheating, arming the EU3 agreement with teeth that it would not otherwise have. Iran desires economic incentives but does not yet desperately need them; without a credible threat of U.S.-backed sanctions imposed by the international community, the mullahs can simply decide one day that the restrictions have ceased to be worth their while, and break any deal as though it were merely a business contract.

For the United States, accepting the EU3's carrot-based approach (provided the benchmarks are added) will show the world that it still supports negotiated diplomacy and multilateralism, even in cases where military threats loom. Participating in this framework will also send a message to Iran that the United States is not ruling out renewed relations. This would resonate with the largely pro-American Iranian populace, who despise their regime and are seeking inroads to break free of it.

But if the United States instead presents itself as a unilateralist maverick, it will hinder its own interests; the only thing Iranians disdain more than the mullahs is outside meddling with their deeply nationalistic desire for self-determination. The more overtly hostile the United States acts toward Iran, the more the mullahs are able to spin America's posture to alienate Iranians against the "Great Satan."

The way to keep the Iranian regime in check while speeding its demise is to insure the nuclear agreement through benchmarks and triggers, and then give the mullahs exactly what they ask for in terms of increased access to international institutions like the World Trade Organization.

Such carrots can also be Trojan Horses, allowing the forces of democratic reform within Iran to blossom by enabling pro-democracy elements to make global connections. The U.S. and Europe should saddle up those horses together.