Washington ? Bomb blasts that destroy Israeli school children and other “Zionist entity targets” bring significant harm to the Palestinian people as well. The war of terror against the Israelis now risks burying in its debris the hopes for an independent Palestinian state that will live in peace with Israel.

The need for such a Palestinian state has never had wider support from world leaders. It was offered to Yasser Arafat by Ehud Barak and Bill Clinton at Camp David in July 2000. George W. Bush has spelled out in greater detail his commitment to a Palestinian state than Clinton or Jimmy Carter ever did while they were in the White House.

But history is littered with inevitable moments that were sidetracked into oblivion. Ask the Kurds about the state they were promised eight decades ago. Or the Egyptians and Syrians about their plans for the United Arab Republic. Without a determined and focused international effort led by the United States, this fate could now overtake the Palestinian state that seemed in reach two long years ago.

Arafat refused the offer and turned to violence. And he cleared the way for Islamic extremist organizations that are not interested in any two-state solution, whether backed by Clinton, Bush or Saudi Arabia’s Prince Abdullah. The bombers and their supporters want a no-state solution.

The destruction of Israel is their more obvious and immediate goal. But the nation-state itself is also a target of the jihad organizations that help stage the suicide attacks and other outrages. Why settle for Palestine when your dream is a universal Islamic polity?

This is Arafat’s ultimate folly. He has played not only into the hands of Ariel Sharon, whose recent actions underline his determination to have Israel dominate the Palestinians rather than separate from them. Arafat has also helped empower extremist Islamic forces that see Palestinian nationalism as another obstacle in their path.

The destruction of the pitiable West Bank and Gaza political entities that Arafat has established thus seems assured – by the Sharonists, the jihadists, or a combination of the two. More importantly, the political and economic bases for a Palestinian state are being erased even as the Bush administration, Europe and the Arab League extol Palestinian statehood as key to an eventual peace settlement.

Any doubt that Sharon was only paying lip service to the statehood concept evaporated earlier this month when he proposed new Israeli settlements in Hebron as a response to the grisly execution of a dozen Israeli soldiers and settlers in that explosive West Bank city. Removing the settlements – not expanding and entrenching them – is an essential element of a peaceful two-state solution.

Bush missed his opportunity to lock Sharon into agreement on the settlements in easier times: He is not likely to be willing or able to back Sharon off his hard-line position in the midst of the U.S. buildup against Iraq or the political campaign now under way in Israel for January elections.

But the American president must make clear now that he will tackle Middle East peacemaking with a new urgency and focus as soon as he can. He can no longer simply hold out Palestinian statehood as a carrot to be delivered if and when the Palestinians dump Arafat and otherwise get their act together. The Bush administration should explicitly recognize that current policies and practices of both Israeli and Palestinian authorities point toward a dead end of violence and despair that will foreclose a meaningful statehood option, not bring it closer.

The other would-be peacemakers would then have to admit that they are heading for failure with their current approaches. Europe and the Arab League have to do more than simply criticize Bush for not squeezing Israel. Saudi Arabia has to deliver on its months-old promise to move Arafat aside and find responsible Palestinian nationalists to take charge and fight the terrorist organizations that want to smother their state in its crib.

Israel’s West Bank and Gaza settlements have become vulnerable hostages that require ever-growing military protection to survive. An American commitment to a viable Palestinian state will be canceled out by U.S. acquiescence to plans by Sharon or anyone else to keep and expand the settlements. Bush should choose peace over the settlements.

The president has rightly refused to reward Arab terrorism by making concessions to Arafat as the bombs explode. Washington must also be careful not to let Sharon exploit anti-terrorism by using the horrors being inflicted on his people to advance the cause of settlements under the cover of bolstering Israel’s security.