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The deal that almost was

To the catalog of missed opportunities for peace in the Middle East, we can add a tantalizing if also depressing chapter: Israeli Prime Minister Ehud Olmert's secret offer in 2008 to create a Palestinian state that would feature international control of holy sites in a divided Jerusalem -- a concession many Israelis have said was impossible.

Condoleezza Rice discusses the Olmert proposal in her new memoir, "No Higher Honor." She writes that as she listened to Olmert's plan during a May 2008 visit to Israel, she asked herself (and the emphatic italics are hers): "Am I really hearing this? Concentrate. Write this down. No, don't write it down. What if it leaks? It can't leak; it's just the two of us."

As Rice tells the story, Olmert developed a comprehensive plan, which he presented secretly to Mahmoud Abbas, the president of the Palestinian Authority, in the summer of 2008. By September, the details of Olmert's offer included:

*Israeli transfer of sovereignty of 94.2 percent of the West Bank to the new Palestinian state. He offered additional swaps of land, and a corridor linking the West Bank and Gaza, that would bring the total Palestinian land area to 100 percent of the pre-1967 borders of the West Bank.

*A formula for dividing Jerusalem that would give Arab neighborhoods to the Palestinians and Jewish neighborhoods to Israel, with negotiators working out the status of mixed neighborhoods. Each country would have Jerusalem as its capital; there would be a joint city council with an Israeli mayor and a Palestinian deputy mayor.

*The Old City would be administered by an international committee with representatives from Israel, Palestine, Jordan, Saudi Arabia, the European Union and the United States. Questions of sovereignty in Jerusalem would be fudged, with each side rejecting the other's claims.

*The "right of return" for Palestinians would be limited to about 5,000. To compensate other Palestinian refugees, a fund of several billion dollars would be created, under Norwegian administration.

*The U.S. would protect Israel's security not just with American power but by training a reliable Palestinian security force.

And what happened to this miraculous package? Because it's the Middle East, you know the answer: It died, with the United States on the sidelines hoping and praying, but Olmert and Abbas too weak politically to take the leap.

What followed this near miss? That's the most depressing part of the story. Rice kept mum, but she gave the new administration details of Olmert's offer. She hoped the United States would use Olmert's plan as a building block for negotiations -- and perhaps even submit it to the U.N. Security Council.

But in one of President Obama's biggest mistakes, he decided to start negotiations all over -- and to demand an Israeli settlement freeze as a test of wills. What a mistake. He was outfoxed by Benjamin Netanyahu, the new Israeli prime minister. Three years later, the peace process is a lifeless corpse.

Rice says she decided to go public with the Olmert plan now because "we've gone so far backward" that the peace process seems like "a lost cause." The lesson of the Olmert gambit, she explained in an interview, is that "an Israeli-Palestinian deal is doable, but they can't keep missing opportunities."

Olmert's proposal, now dust in the wind, may be the best formula we'll ever get for the peaceful creation of the Palestinian state that will cement Israel's own security.

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