The final-status negotiations, due by mid-February, will help determine Israel's size and its role in the Middle East.

Clinton could help by holding out the promise of a Camp David conclusion to the next six months of direct Israeli-Palestinian final-status negotiations.

"Clinton was down to 5 percent of the West Bank, and here you are down to 8 percent before final-status negotiations," Mr. Makovsky said.

If Israel is as forthcoming as imaginable in final-status negotiations, there will still be severe obstacles to normal life in a Palestinian state.

He is also reportedly considering offering more than the Wye agreement demands in certain areas, and making certain critical concessions within the context of the final-status negotiations.

"I have asked the Prime Minister to cease all settlement activities, which are illegal and destructive to the peace process, so we can resume final-status negotiations," he said.

Labor cannot be trusted, he said, to run the final-status negotiations, which will determine such thorny issues as borders, the return of refugees and the fate of Jerusalem.

"We are not yet at final-status negotiations," she acknowledged at a news conference shortly before leaving Jerusalem.

He said the laws were not meant to authorize "fateful decision making" that could emanate from the final-status negotiations.

He added, "Arafat is preserving this situation for final-status negotiations with Israel."