State department spokesman Richard Boucher said this week that the US wanted to advance a three-track strategy: renewed political dialogue, security cooperation between the opposing sides, and the institutional reform of Yasser Arafat's Palestinian Authority.

"All this would proceed concurrently," Boucher said. But there is disagreement in Washington, let alone in the Middle East itself, about what this means in practice.

On the question of political dialogue, secretary of state Colin Powell is still trying to arrange a ministerial-level conference this summer, to be overseen by the diplomatic "quartet" of the US, the EU, the UN and Russia.

A preparatory quartet meeting is due in Washington tomorrow, but Bush appeared to undercut the conference idea when he hosted Israeli prime minister Ariel Sharon at the White House earlier this week.

Although officials subsequently tried to finesse his comments, Bush clearly suggested that he believed (like Sharon) that the time was not yet ripe for such a conference. "The conditions aren't there yet," Bush said. Powell replied: "We're haven't backed away from the idea yet."

This is not the first time splits have emerged within the administration over what to do in the Middle East. Still on the issue of resumed political dialogue, Sharon insists that Arafat is not a reliable partner for peace and will not deal with him.

Although the US (and the rest of the quartet) say he must be accepted as Palestine's leader, in truth Bush plainly agrees with Sharon.

He has refused to meet or talk to Arafat and has scorned the Palestinian leader's recent shake-up of his administration and security apparatus. Bush's speech next week is unlikely to overcome this basic antipathy.

Renewed Palestinian-Israeli security cooperation - the second US "track" - is equally problematic. The Bush administration has tried several times in the past 12 months to build bridges and restore confidence, dispatching senior envoys such as CIA director George Tenet. Each time the effort has failed amid renewed suicide bombings and army incursions.

The Israelis say this proves their contention that there can be no meaningful cooperation on security (or anything else) without a prior halt to the violence and an extended period of calm - and that Arafat is insincere or ineffectual (or both) when he talks of reining in the intifada.

In turn, the Palestinians, especially the younger, more militant non-Fatah factions, say there can be no ceasefire while Israel's occupation of West Bank territories continues.

As for the third "track" - reform of the Palestinian Authority - Palestinians suspect, with some justice, that this is an Israeli delaying tactic and an excuse for prolonging the stalemate. After all, when would a reform programme, going beyond those measures already undertaken by Arafat, be judged to be complete? And who would make that judgement?

Meanwhile, Arafat suspects, again with justice, that Sharon's concept of reform includes his own replacement or sidelining to, at most, a symbolic figurehead.

All the same, Bush (and the largely impotent EU) appear to support Sharon's contention that unspecified, open-ended reforms must be a precondition for any future negotiations and subsequent Palestinian statehood.

Even worse, from a Palestinian perspective, Sharon has repeatedly made clear that even if, at some distant future date, he could persuade his coalition colleagues to countenance the declaration of a Palestinian state, such a state would not include large parts of the Jewish-settled West Bank.

In other words, what the Palestinians would get would be considerably less than what was on offer two years ago at the Camp David summit. For his part, Bush says he will not pressurise Sharon.

Given all these obstacles and caveats, personal animosities and public disputes, plus the internal US administration divisions over how best to proceed, Bush's speech next week is in danger of becoming a grandiose cop-out, focusing on broad, long-term objectives and avoiding for instance any attempt to create a road-map or timetable for peace.

That will probably be acceptable to Sharon. It may even satisfy the pro-Israeli lobby in the US Congress that is now allied with the evangelical Christian right and hawkish "war-on-terror" hardliners. But it is hard to see anybody else being terribly impressed.

The Saudis, who have developed their own peace plan and whose Crown Prince Abdullah travelled to Texas recently to press it on Bush, will feel rebuffed. So, too, in all probability will Egypt.

President Hosni Mubarak met Bush this week and urged him to set a deadline for Palestinian statehood. If he is not careful, Bush's speech may be read by Mubarak, and others such as Jordan's King Abdullah, as a deliberate snub.

In Europe, meanwhile, the US will be accused, once again, of failing to exercise or to hand over its leadership responsibilities. Yet, oddly enough, Bush's anticipated sidestepping of these complex issues does not serve key American interests, either.

As defence secretary Donald Rumsfeld confirmed again this week during a visit to Kuwait, "regime change" in Iraq remains the Bush administration's most pressing Middle East priority.

But an invasion or other form of concerted action against Saddam Hussein will be almost impossibly problematic if the entire Arab world is up in arms over Palestine.

Much the same holds true of that other founding member of the "evil axis", Iran. Secondly, the US needs Arab and Muslim allies if the "war on terror" is to go forward.

This week's arrests of alleged Saudi al-Qaida agents in Morocco is proof enough of that. If the US continues to fail in its peacemaking efforts, and to be seen as helplessly biased in Israel's favour, those allies will drift away - if not turn outright hostile.

This applies potentially not only to Cairo and Riyadh but to other fragile and undemocratic regimes in countries such as Pakistan, too.

Last but not least, the Palestinian crisis has the potential, if allowed to deepen or spread, to derail the entire US strategic relationship with the Middle East. That cocky types such as Rumsfeld dismiss this contention (as he did in Kuwait) does not make it any less true.

The longer the blood keeps flowing in Palestine, the greater the probability of dire economic and political consequences for the US down the pipeline. In short, whatever his feelings about Israel and Arafat, Bush has strong and persuasive reasons to act decisively, in America's national interest, to resolve the Palestinian-Israeli conflict.