The Israeli industrialist looked over the lines of spinning and weaving machines and listened to the two young Arabs explaining the finer points of the computerised control system they had set up themselves. In the back office, over tea and baraziq biscuits, the deal was done. The Aleppo factory would make 10,000 pairs of jeans a week which the Israeli partner would supply to big European retail chains under franchise agreements.

Scenes such as this are now finally being played out in Egypt, 17 years after the peace treaty. In Syria they are still in the realms of fantasy. But ever since 1992, when Syria started to discuss a peace settlement with Israel, the implications of such a peace have been debated intensely. Most Syrians are suspicious.

‘Israel is only interested in economic domination.’ is a common theme. But some Syrian business people are looking forward to doing commercial battle with their erstwhile enemy. ‘There are only two countries where business is based completely on trust,’ says one Damascus industrialist:

‘Syria and Israel.’ For the time being, however, any contact between Syrian and Israeli business people will have to wait until the large elements of mistrust that exist between their respective political masters are removed.

The Syrian track of the Middle East peace process has been a tortuous affair. From the Israeli point of view, this has been mainly because of Syria’s refusal to express any enthusiasm about the prospect of making peace with Israel. In Damascus, the complaint is that Israel has refused to take account of Syrian sensitivities, and has cluttered the negotiating table with marginal issues, such as the composition of Syrian history text books.

By the middle of 1995, the late Israeli prime minister Yitzhak Rabin had lost patience with Syria, and had evidently decided to freeze negotiations until after the elections, which had to take place before October 1996. Rabin had been offering a staged withdrawal from the Golan Heights, demanding that Syria should make moves on normalisation after the first stage. Syria’s position was that the Israeli withdrawal should take place first, and should be completed in a relatively short time, not more than two years. Only at the end of that process would matters like diplomatic and economic relations be decided.

Mood swings Rabin signalled his intention of stopping the Syrian negotiations when in the summer of 1995 he tabled a demand that Israel should retain its early warning stations on the Golan. This was unacceptable to Syria, as Rabin well knew.

Rabin’s assassination in November 1995 produced a temporary change of mood. His successor, Shimon Peres, let it be known that he was not concerned to keep the early warning stations, and the Syrian and Israeli negotiating teams held a series of talks at Wye Plantation, near Washington. Peres promptly decided to capitalise on his newfound popularity, and go for early elections, due to take place on 29 May.

Palestinian Islamists then carried out four suicide bomb attacks in Israel between 25 February and 7 March. The attacks, which left 59 Israelis dead, were aimed at harming the peace process, and by this token were highly successful. Peres called his negotiators back from Wye Plantation, and watched anxiously as his opinion poll ratings fell. To add insult to injury. Hezbollah forces stepped up their operations against Israeli forces in south Lebanon, and, when Israel responded, fired rockets at the Israeli border town of Kiryat Shmona.

This was the cue for Peres to launch Operation Grapes of Wrath, the 17-day onslaught against Lebanon, apparently intended to weaken Hezbollah and convince Syria that it has an obligation to renounce its associations with terrorists, defined as groups continuing to attack Israel. The operation will be chiefly remembered for the carnage at Qana on 18 April. when 100 Lebanese civilians were killed when Israeli artillery shells hit a UN base. Hezbollah’s capabilities were not weakened and Asad had a golden opportunity to present himself as the central figure in Middle East peace negotiations.

Centre stage Foreign ministers from the US, France, Italy and Russia descended on Damascus to try to find a way out of the crisis. The result was the 27 April understanding. which in most essentials was identical to a similar agreement reached with Rabin three years before. Crucially for Asad, the understanding legitimises continued Lebanese resistance operations in occupied south Lebanon, and emphasises the need to resume peace negotiations between Syria and Israel.

However, the US and Israel have worked hard to counter the impression that Asad might have won a diplomatic victory. US Secretary of State Warren Christopher has let it be known that he was offended by Asad’s refusal to receive him on 23 April, at the height of the crisis. He rammed the message home in a 3 May interview with the Los Angeles Times in which he expressed doubts about Asad’s commitment to making peace with Israel. ‘His mistrust is so deep that it causes apprehension, worrying that somehow he’s being taken advantage of by the Israelis,’ Christopher said.

What US policymakers appear to hope is that once Peres wins re-election, some of that mistrust will start to ebb away. Moshe Maoz, Fellow of the Truman Institute at the Hebrew University in Jerusalem and a lifelong student of Syria, says he is confident a peace agreement can be negotiated quickly if Peres wins. Syrian officials refuse publicly to endorse this logic, and the argument that Egypt made peace with a Likud government is often trotted out to back the view that there is no essential difference between the two Israeli parties.

In reality, Asad can have few illusions about prospects for peace with a Likud-led Israeli government in power. High on the Likud electoral list are Ariel Sharon and Rafael Eitan, respectively defence minister and chief-of-staff during the 1982 Israeli invasion of Lebanon. These two notorious hawks would be given prominent cabinet positions in the event of a Likud victory:

territorial concessions to Syria are most definitely not part of their vision for the future of the Land of Israel.

By contrast Peres is crystal clear on the need to give up the Golan. ‘If we are not ready to compromise on the Golan Heights, there will not be peace with Syria and Lebanon,’ he said on the election trail on 8 May. He also emphasised, in the same speech, that he believes Asad can be trusted. ‘I am not a fan of Syrian President Hafez Asad. But 23 years ago he signed an interim agreement with us that was very uncomfortable from his point of view because we stayed on the Golan. He committed then not to cross the border and stood by his commitment over the years. It is very hard to reach an agreement with Asad, but if you do reach an agreement with him, he honours it.’ If Peres can persuade the Israeli public that they too should put their faith in Asad, a peace settlement may indeed be imminent, and it will only be a matter of time before the merchants of Damascus seek out their Israeli counterparts.