Nine months after the Israeli electoral success of Mr Ehud Barak offered the hope of rapid progress towards regional peace, the Middle East has reached a moment of truth.
On the positive side, the Israeli cabinet formally voted yesterday to withdraw Israeli troops from Lebanon by July at the latest. And the Prime Minister is insisting that he is determined to reach peace treaties with the Palestinians, the Syrians and the Lebanese - to complete the elusive "circle of peace".
On the negative side, the Israeli-Lebanon border has rarely been more tense, Israeli-Syrian and Israeli-Palestinian peace talks are stalled, and the Hamas Islamic resistance movement is apparently bent on launching a new wave of suicide bombings.
Frustrated by the breakdown in negotiations, the President of the Palestinian Authority, Mr Yasser Arafat, has in recent days pledged several times to declare independent statehood in mid-September, the deadline for the completion of a permanent peace treaty with Israel, whether or not the deal is done by then.
Some of his aides are threatening to take full control unilaterally at that time of parts of the occupied West Bank where the Israeli army is still deployed - a surefire recipe for confrontation.
Although both men profess their desire to make a success of peace negotiations, Mr Barak blames Mr Arafat for the current deadlock, and Mr Arafat, needless to say, volleys that accusation straight back. Watching from the wings, and sensing the growing Palestinian public despair, Hamas is feared to be bracing for action.
The Israeli security forces are currently on full alert, with extra roadblocks at the crossing points between the West Bank and Israel and extra manpower deployed in major cities.
Four Hamas members, holed up in the Israeli Arab town of Taibe, were killed last Thursday by an Israeli commando unit. A fifth man, who was captured, is said to have told Israeli interrogators that the gang intended to carry out five simultaneous suicide strikes, at five locations frequented by large numbers of soldiers, yesterday.
The Israeli cabinet's unanimous affirmation yesterday of Mr Barak's oft-repeated promise to leave Lebanon by July, meanwhile, was couched in optimistic terms. The government, a statement said, would "act to ensure" that the withdrawal would be carried out as part of a wider peace agreement with Syria and Lebanon.
Reinforcing the optimism, Israeli television claimed this weekend that an Israel-Syria peace treaty could be signed within three to five weeks, and the Arab media reported tentative preparations for a summit between Mr Barak and President Hafez al-Assad of Syria in Geneva. Although Syria, Israel and the US issued firm denials of both sets of reports, all the relevant parties do appear interested in using the final months of the Clinton presidency to achieve a breakthrough.
Nevertheless, before resuming talks, Syria is still demanding a public commitment from Mr Barak to a full Israeli withdrawal from the Golan Heights. But the Israeli Prime Minister cannot make such a commitment and keep his coalition together.
Israeli public support for a Golan-for-peace deal, meanwhile, is slipping - in part because of the recent much-publicised Israel-bashing in the Syrian media, which has taken to comparing Israel's policies in Lebanon with those of the Nazis.
In South Lebanon this weekend, two Hizbullah guerrillas were reported killed, an Israeli soldier was badly injured, and Israeli planes raided suspected Hizbullah hideouts. That adds up to a relatively unremarkable weekend's fighting by the sorry standards of these parts. If peace hopes evaporate, the violence will only get worse.
The Lebanese Prime Minister, Mr Salim Hoss, welcomed the Israeli cabinet decision, but said he preferred it to happen as part of an accord.