(October 18) - Arabs think they have Israel on the run. Any ceasefire coming from the summit at Sharm e-Sheikh will reinforce that perception, because Israel failed to respond strongly to the Palestinian attack on Israelis and the desecration of Jewish holy places. And the US failed to support Israel. Palestinians believe that they will regain all of Palestine because they are willing to die for their country and Israelis are not.
The Arab demonstrations as far away as Morocco show that many Arabs throughout the Middle East can also taste Israeli blood, partly because for more than half a decade they have seen Saddam Hussein's power rising and the US retreating. The palpable Arab sense of victory, starting with Israel's flight from Lebanon, is based on illusion, but the illusions will inevitably lead to new attacks until this false confidence is brutally shattered - which is the first step to serious peace negotiations.
Israel must now do two things to regain the deterrence it needs to survive: First, demonstrate that it has overwhelming power and the will to use it - so that the Moslem adage, "a Moslem should obey someone who has overwhelming power" applies. Second, take back some of what the Palestinians had gained under Oslo, so that it is clear that their violence made them worse off than they were before.
If Israel thinks strategically, it might start by using indirect means to regain Palestinian respect. For example, Israel could respond to the Hizbullah kidnapping and attacks from Lebanon by throwing the Syrian army out of Lebanon - they could march north and again cut the Beirut-Damascus highway. The Syrian forces in Lebanon are not capable of serious fighting and could only save themselves by leaving the country in the first few days after Israel made its move.
Israel could leave Lebanon as quickly as it entered, having dramatically changed the political situation in both Lebanon and Syria. The weak government in Syria would be unlikely to invade Lebanon a second time.
After having chased the Syrians away, Israel would meet with much less resistance when it sends its army to the edge of the Palestinian cities in order to support units which go through the cities to collect weapons, capture terrorists, and destroy military facilities. This kind of action would demonstrate that no area is beyond the IDF's reach, and that Palestinian "strongmen" have to hide to save themselves.
Israel can also retake the Tomb of Joseph and reestablish Israeli security forces as the sole forces on the Temple Mount. The principle is that violent attacks on exposed Israelis will result not in Israeli retreat but new arrangements at the Arabs' expense.
Finally, Israel should reoccupy some Arab villages along the Green Line that are potentially dangerous to Israeli communities.
Despite public rejection, Barak is doing whatever he can to stay in power - except the one thing that would save him, which is acting to restore Israeli deterrence.
Despite Barak's failures to date, Israel will be better off with Barak if he changes his ways, rather than with a new government entirely. Israel needs to unite and make its move before the Arab summit - under Saddam Hussein's prodding - responds to Israeli weakness by initiating a campaign against Israel.
If Barak gives surrenders his illusions and create an emergency government for the purpose of defeating the Palestinian attack, he can preserve himself and his party from shameful dismissal.
But if he continues to act as if catering to an irresponsible foreign opinion is the solution rather than demonstrated strength, new elections should be held.
Paradoxically, the only way to reverse the verdict expressed by the UN is for Israel to counterattack. In any event, when Israel's army shatters Arab illusions, the world will accommodate itself to reality as it always has, and the Arab countries will do the same.
But the opinions that count are those of Palestinians and Israelis. The Palestinians know that they have challenged Israel's right to stay on its land. To live with its Arab neighbors, Israel must demonstrate that it is united in its determination to stay here.
There can be no peace unless Palestinians see that Israelis believe in their rights as much as the Palestinians believe in theirs.
The writer is a founder of the Hudson Institute.