He is at it again, and again it is working. He is launching colorful balloons, and the whole world is looking on with rapture and wonderment.

Ariel Sharon needs to divert attention. His popularity has dropped in recent opinion polls. The Geneva initiative has captured the national and international agenda. The police investigations into his corruption affairs have reappeared in the headlines. Army and Security Services officers have criticized him publicly. He has been accused of immobility, foot-dragging, the lack of a plan.

So he is launching balloons: "Unilateral steps". Sensation! "In the future we shall not be in all the places we are now". Shock! "We shall be moving settlements". Uproar!

He has sent Ehud Olmert to exercise his jaw on every talk-show, warning against the terrible danger of a "bi-national state". His plan, Olmert declares, will ensure the existence of a "Jewish state", 80% of whose population will be Jewish. Since already more than 78% of Israel's citizens are Jewish, this must mean that densely populated Palestinian territories would not be annexed. Sharon's office has leaked reports that Olmert is echoing Sharon's own view, and that Sharon himself will make a sensational statement to this effect next week in Herzlia.

General turmoil! The Geneva Initiative is almost forgotten. All the pundits are busy with wild speculation: What is Sharon up to? What does he mean? What is he going to do? Is Bush compelling him to change his spots?

Olmert's conversion from screeching hawk to cooing dove has been all the more convincing because at the same time, quite by accident, he has been forced to accede to an European demand to mark the "place of origin" on all Israeli exports to Europe. This is meant to block preferential customs treatment for the products of the settlements. The settlers have started a furious campaign against him. They have plastered the walls of Jerusalem with posters showing Olmert stamping settlement products with a Nazi-style yellow star of David, with the word "Jude" on it. (For good measure, they have put my picture on the poster as well, just to show who is pulling the strings.)

So now it is clear: Olmert is a dove, a reincarnation of the Prophet Elijah, announcing (according to Jewish tradition) the coming of Sharon, the Messiah.

The leaders of the Labor Party are already taking the nylon covers off their ministerial suits. Any moment now, they believe, Sharon will call on them to take the places of the extreme right-wing ministers in his government. Shimon Peres is about to fulfil his dream and become a minister again.

Who would have believed it! Sharon is the Israeli de Gaulle, after all! Peace is on the way!

All this confirms the old American adage: A sucker is born every minute.

I have already warned a dozen times: Don't pay attention to what Sharon says, pay attention to what Sharon does. His pronouncements can be ignored, they serve only to fulfil the tactical requirements of the moment. But his actions are very, very important.

And his actions are quite clear: The Wall is being extended at a frenzied pace. In the Sharon tradition, it is creating "Facts on the Ground." The Palestinian territory is being cut into ribbons. Before our eyes, isolated Palestinian enclaves are appearing, each of them an open air prison. And while the army is removing one uninhabited mobile home in one "illegal" hilltop outpost, the government is pushing the enlargement of the settlements by all available means.

This is a vigorous campaign, employing all arms of the government. Only a person completely cut off from what's happening in the occupied territories can claim that things are "frozen". Only a person living in the virtual world of the media could believe that Sharon has no plan.

He does have a plan, the same one that he has been following for decades. His and Olmert's statements do not contradict it, quite the contrary. Here are its basic principles:

• "Unilateral steps": There will be no peace agreement with the Palestinians. They will be imprisoned behind the walls and the fences, a continuation of the occupation by other means.
• "A state with an 80% Jewish majority": All sparsely populated Palestinian territories will be annexed. That will include half the West Bank (the former Area C), all the major highways, the entire Jordan valley, many of the olive groves and fields of the Palestinian villages (but not the villages themselves.)
• "Painful concessions": Israel will give up the Palestinian population centers, towns and blocs of Palestinian villages (the former Areas A and B) and most of the Gaza Strip. All the enclaves together will amount to some 45% of the West Bank. Together with the Gaza Strip, they will constitute only some 10-12% of the original territory of Palestine before 1948.
• "A Palestinian state": Sharon is ready - indeed, keen - to have these enclaves called "a Palestinian state". This will free Israel from taking any responsibility for the population. If they starve or decide to move elsewhere - so much the better.
• "Moving settlements": The dozens of small settlements built in the Palestinian population centers will be transferred to the areas that will be annexed to Israel, enlarging the Jewish component.
• "The terrorism will continue": This will not end the war. Indeed, Sharon and his people have no interest in ending it. As far as they are concerned, it can go on forever. The Palestinians will always be blamed. The redeployment will make life much easier for the army, since there will no longer be a need to devote substantial forces to the defense of isolated settlements.

This is the opposite of the Geneva Initiative, which is based on the belief that an agreement with the Palestinians can be achieved. It is also the opposite of the Road Map, to which both sides still pay lip service, while treating it as a whim of President Bush that has been forsaken by Bush himself. Sharon "accepted" it at the time - with 14 reservations that emptied it of all meaning. In practice, he did not take even the first step along this road (any more than the Palestinians did).

The peace plan of Sharon and Olmert proclaims the continuation of the war against the Palestinian people. It is a provocation to the United States and world public opinion.

How will it affect opinion in Israel? Perhaps it will divert into another channel the growing longing for peace, which found some expression in the Geneva Initiative. Sharon and Olmert play upon two powerful tendencies in the Israeli subconscious: (a) racist attitudes towards Arabs, which undermine belief in the possibility of peace with them, and (b) the desire for a Jewish state, without Goyim (non-Jews) in general and Arabs in particular.

Some say that the Sharon initiative is nothing but media spin. Just another of Sharon's utterances that have little to do with reality. But anyone who sees the walls and fences that are now going up, will recognize the new reality that is being created.