EHUD OLMERT raised his hands before his face, two fingertips almost touching: “We were that close!”

He was talking about the negotiation he had conducted personally with Mahmoud Abbas, just before he himself was forced to vacate the Prime Minister’s office.

That was the climax of the speech he made last week at a meeting of the “Geneva Initiative”. Before analyzing it, a few words about the host and about the speaker.

THE GENEVA INITIATIVE rose like a meteor and fell like a meteor in the early 2000s.

At its center was a serious effort to draft a full and final peace agreement with the Palestinian people. It came after a draft prepared by Gush Shalom and resembled it in many ways. But there were two big differences: the Geneva Initiative had an identified Palestinian partner, and it was far more detailed. While the Gush Shalom draft only laid out the principles, the Geneva draft went into detail and covered 423 pages, plus maps.

When this draft was unveiled in an impressive ceremony in Geneva, in the presence of senior international personalities (and in the absence of the “radical” Israeli peace camp, which had been boycotted by the initiators in order to stress their “mainstream” character), it was an international event.

For some months, the initiative was at the center of world attention. Many governments found it interesting. I, too, was active on its behalf, in spite of the fact that I had not been involved. I spoke about it with several statesmen, including the President of Germany and the German Foreign Minister. Everywhere I found a very positive attitude. Everybody appreciated the initiative and was eager to help.

And then it disappeared, as rapidly as it had risen. The coup de grace was delivered by Ariel Sharon, the Prime Minister, who drew from his hat the rabbit called separation. Its implementation was accompanied with much drama and melodrama, and the world forgot about Geneva.

What remains is a group of supporters, one peace association among many, who publish ads from time to time and convene the occasional meeting. Olmert’s speech was made at such a meeting.

In the meantime, something strange has happened to the Initiative. Its spiritual father was Yossi Beilin, a person with a fertile – some say, over-fertile – mind. Beilin started his chequered career in the Labor Party, as an assistant to Shimon Peres. When he did not make their Knesset list, he joined Meretz, became its leader and led it to disastrous election results.

Recently, a bizarre situation has arisen. Beilin is still the chairman of the Geneva Initiative, but now he opposes the idea of a full peace agreement that would put an end to the conflict. He claims that such an agreement is impossible, and that the aim should therefore be an interim agreement - the very opposite of the Geneva Initiative.

The Oslo agreement has shown that an interim agreement is but the continuation of the conflict by other means – not a precursor to a final agreement, but a mechanism for its prevention. The initiator of the initiative has become its undertaker.

FROM THE host to the speaker. Ehud Olmert is the most unpopular politician in the country today (quite an achievement, given the competition).

Right from the beginning of his political career, a cloud of suspicions has hovered over his head, and in the course of time it has become thicker and thicker. As of now, half a dozen criminal trials and police investigation are in progress against him, concerning bribes, fraud, forgery and more. Quite possibly he may end up in prison, to be greeted by several of his colleagues, including his finance minister.

As if this were not enough, Olmert is conducting a bitter campaign against his former ministers, and especially Ehud Barak, hurling at them a barrage of accusations. One of the most serious (in his eyes): that Barak had tried to shorten the Cast Lead operation.

Amid all this clamor, Olmert has found the time and the energy for the speech at the Geneva Initiative meeting, in which he described in detail his efforts to achieve peace with the Palestinians. With the help of his two forefingers, he asserted that peace had been very close, and that a full and final agreement could be achieved now. Thus he adopted a position that is far to the left of that renowned leftist, Yossi Beilin.

From the practical political point of view, the speech carries little weight. The public is much more interested in his forged accounts and the dollar-stuffed envelopes that he received. The part of his speech in which he belabored Barak (“Ehud vs. Ehud”) completely overshadowed the part devoted to peace.

YET IT is worth taking notice of what he had to say. Especially since it comes from a person who grew up in a right-wing home and who has spent his whole career in right-wing parties.

For half an hour, speaking fluently without recourse to notes, Olmert dealt with the core issues of the negotiations with the Palestinians.

As far as the borders are concerned, Olmert argued, agreement had been almost reached. The border would be based on the (pre-1967) Green Line, with exchanges of territory that would leave the large settlement blocs in Israel.

In this matter, it seems, a consensus has gradually come into being. But only in principle, because two large boulders block the way to an agreement.

The settlements hard on the border should not pose too much difficulty. The Etzion Bloc, Modi’in-Illit and Alfei Menashe are located almost on the border, and can be exchanged for Israeli land.

But two settlements that are located deep in Palestinian territory – Ariel and Ma’aleh Adumim - pose quite different problems. Ariel is located 20 km from the Green Line, near the spine of the West Bank (the Nablus-Jerusalem road). Together with the road that connects it to Israel proper, Ariel cuts up the Palestinian territory.

If Ma’aleh Adumim were to be connected with Jerusalem by an extension of Israeli territory, this, too, would almost cut the West Bank into two. Traffic between Nablus and Hebron would be forced to take a wide detour.

The evacuation of these two big settlements would pose a huge problem. Their continued existence would pose an even bigger one. Perhaps creative solutions can be found: staying there under Palestinian sovereignty, or remaining as small enclaves inside the Palestinian state. Some think of connections such as tunnels, bridges or special roads, like the one that once connected West Berlin with West Germany.

The solution will largely depend on the nature of the border between Israel and Palestine. If it is an open border, with the free movement of people, everything will be easier. Much as traffic will move freely between Gaza and Hebron through Israeli territory, it may move from Ariel to Kfar Sava through Palestinian territory. However, it is uncertain whether the Palestinians would agree.

ACCORDING TO Olmert, the Jerusalem problem can be solved along the lines laid down by President Bill Clinton: what is Jewish will go to Israel, what is Arab will go to Palestine.

This will necessitate a further big concession on the part of the Palestinians, since some Jewish neighborhoods have been built as settlements beyond the Green Line. For their readiness to allow them to be joined to Israel, the Palestinians would have to receive very large compensation.

But the main thing is that Olmert has finally laid to rest “Jerusalem reunited, the eternal capital of Israel”. He has put the partition of Jerusalem squarely on the table, without subterfuges like Barak at Camp David and without Beilin-style creative tricks.

BUT THE most important breakthrough in Olmert’s speech was on the refugee front.

Olmert agreed that Israel should admit its part in the creation of the problem, and proposed to Abbas a comprehensive plan for the re-settlement of all refugees, including the return of some tens of thousands to Israel.

The importance of this point cannot be exaggerated. The refugee problem has profound emotional ramifications. It touches the very roots of the Israeli-Palestinian conflict. Until now, all Israeli governments have denied our responsibility and refused to discuss the return of even one refugee (except some miserly “family reunion” cases).

To my mind, the number proposed by Olmert is less important than his agreement to allow the return of refugees at all. As the joke goes, after the respectable lady agreed to sleep with the gentleman for a million dollars, “now that we have agreed on the principle, we must discus the price.”

If the negotiations are no longer about “whether” refugees will come back, but about “how many”, no doubt agreement can be reached. (Gush Shalom proposed 50 thousand a year for ten years. The Geneva Initiative proposes a complicated formula which boils down to the return of some tens of thousands.)

WHY IS this important? With Olmert’s popularity approaching zero, does it really matter what he says at all?

Olmert is an optimist and has a lot of self-confidence. He believes that he will get out of his troubles somehow and return to the political arena. He really believes that he can become Prime Minister again.

No one denies that he has very sharp political instincts. If a person with such ambitions proposes an agreement, it means that he is convinced that these positions are now accepted by the great majority.

That’s the reason I suggest taking a good look at Olmert’s fingertips.