ouston - Two developments - the re-election of President Bush and the emergence of a new Palestinian leadership in the wake of Yasir Arafat's death - have created a unique opportunity for negotiating peace between Arabs and Israelis.

The president should, of course, continue with his goal of spreading democracy in the Middle East. And the planned elections in Iraq this January are a critical step in the right direction. But it is imperative that the president also actively promote peace between Israelis and Arabs.

Stability in Iraq and peace between Palestinians and Israelis can be pursued at the same time. In fact, working toward the latter improves the chances of attaining the former. The road to peace does not run through just Jerusalem or just Baghdad. That is a false choice. Today it runs through both.

The so-called quartet (the United States, the European Union, Russia and the United Nations), which has been working on a "road map" for peace between the Palestinians and Israelis for several years, supports a two-state solution, as do the vast majority of both Palestinians and Israelis. President Bush certainly favors this goal, and Prime Minister Ariel Sharon of Israel has publicly supported it as well, although in April he said that the Israeli withdrawal from Gaza could delay a Palestinian state "for many years."

Only the real hard-liners on both sides - Arabs who refuse to recognize Israel's right to exist and Israelis who want to keep the occupied territories rather than exchange them for a secure peace - prefer a one-state solution. A one-state solution would ultimately mean the end of Israel as a democratic Jewish state and would, of course, also foreclose Palestinian aspirations for their own independent state existing peacefully alongside Israel.

So the real question is how to take advantage of this window of opportunity to achieve that two-state solution. Specifically, what steps should be taken? Who needs to do what?

First, it is critical that negotiations resume. For this to happen, of course, Israel must have a negotiating partner on the Palestinian side. That partner will best emerge from free elections. Elections have been scheduled for Jan. 9, and all who support peace between Israel and the Palestinians have an obligation to do all within their power to see that those elections are successfully held.

Palestinian candidates should clearly and unequivocally renounce terrorism as a means of achieving a political result - and call upon their supporters to do likewise. And those Palestinians should commit themselves to an unequivocal, good-faith effort to crack down on terrorist groups make a target of Israel.

In exchange, Israel should announce that upon the election of a Palestinian negotiating partner, it is prepared to resume substantive negotiations for peace without requiring that all terrorist activities cease in advance. To require the absence of any terrorist act in advance simply empowers the terrorists themselves to prevent the resumption of peace negotiations.

Also, Israel should do whatever it can to encourage freedom of movement and access to polling places under secure conditions to help such elections succeed. It is encouraging that Israel has indicated that all Palestinians will be permitted to vote in such elections whether they live in Jerusalem or in some other location.

The United States should itself clearly embrace and articulate the unequivocal, good-faith standard for the resumption of dialogue. The United States should further prevail upon Israel to cease settlement activity in the occupied territories pending Palestinian elections and during the resumption of peace negotiations. Washington should also do everything else that it can to encourage both sides to resume meaningful talks. And it should serve, where necessary, as a direct participant in the talks, offering suggestions, brokering compromises and extending assurances.

Finally, the administration must make it unambiguously clear to Israel that while Prime Minister Sharon's planned withdrawal from Gaza is a positive initiative, it cannot be simply the first step in a unilateral process leading to the creation of Palestinian "Bantustans" in the West Bank.

We cannot, of course, prejudge the final outcome of any talks. But the plan presented by President Bill Clinton and Prime Minister Ehud Barak at Camp David in 2000 - and rejected by Yasir Arafat - surely offers one plausible place to start.

It is encouraging to witness the quick response from the White House, particularly when President Bush stood with Prime Minister Tony Blair of Britain shortly after his re-election and said that he wanted to establish an independent Palestinian state living in peace and security next to Israel. "I intend to use the next four years to spend the capital of the United States on such a state," he said.

While the United States cannot dictate the terms of peace to either party, it can and should actively promote the resumption of negotiations. The time to start is now.

James A. Baker III was secretary of state from 1989 to 1992.