That conflict seemed to be coming to an end on September 13, when on the South Lawn of the White House, the prime minister of Israel and the chairman of the Palestine Liberation Organization (PLO)--with the blessing of the American president and with millions of stunned television viewers around the world watching--shook hands. They agreed to divide Eretz Israel/Palestine between their two peoples. The Middle East--and probably the entire international system--will never be the same. Observers compared the scene of Yitzhak Rabin and Yasser Arafat shaking hands to that of the fall of the Berlin Wall or the release of ANC leader Nelson Mandela from a South African jail. Before it happened, most Middle East analysts had estimated that the probability that Israelis and Palestinians would make peace was lower than that of Martians landing on earth.

       There was a common thread that tied these three scenes and other dramatic developments that have transformed the global status quo and ignited our imagination in the last three years. It is the end of the Cold War that has challenged the old political games around the world and created incentives for peace--in Cambodia, Central America, South Africa, and the Middle East.

       Post-Cold War Benefits

       On a macrolevel, the end of the superpower rivalry, coupled with the U.S. victory in the Gulf War, has eroded to a large extent the strategic significance of Israel and key Arab states, making it more difficult for them to extract economic and military support from outside powers in exchange for their services.

       While Syria and the PLO lost their Soviet benefactors, Israel could no longer sell itself in Washington as an anti-Soviet strategic asset. While the Arab Gulf states cut off their financial aid to the PLO to punish it for supporting Saddam Hussein during the Gulf War, a more inward-looking, if not isolationist, America seemed less willing to continue funding its entitlement program to Israel.