ERUSALEM -- Two years ago this month, at a summit meeting in Beirut, Lebanon, Arab leaders adopted a Saudi-initiated resolution that they said was intended to resolve the Israeli-Palestinian conflict. They urged Israel to relinquish all the territory it captured in the 1967 war — in the Golan Heights, Gaza Strip, West Bank and East Jerusalem. They called for a "just" and "agreed" solution to the vexed issue of Palestinian refugee claims to a right of return to sovereign Israel. And in exchange they promised to "establish normal relations with Israel."

Sadly, this Beirut Declaration made absolutely no impact on the warring protagonists. The timing couldn't have been worse. Yasir Arafat, leader of the Palestinian Authority, was busy encouraging "a million martyrs" — a wafer-thin euphemism for suicide bombers — to march on Jerusalem. Israel was busy trying to stop them and secure Prime Minister Ariel Sharon's promised military victory. The Arab proposal was unveiled the day after the bombing of a Passover seder at a hotel in Netanya, Israel, which killed 30. Over the course of that March, Israel suffered more fatalities from terrorist attacks than in any other month in its modern history.

What's more, Israel, which was supposed to have been impressed by the reference to an "agreed" solution on the refugees, found the clause's language unconvincing, and was infuriated by the declaration's praise for "the valiant martyrs of the intifada." Finally, there was a strong sense that the entire initiative amounted to an unsubtle Saudi attempt at post-9/11 rehabilitation.

But now there is a second chance for progress — and President Bush can play a role. Arab League leaders are meeting again, in Tunis, at the end of the month. The advance word is that the Saudis, along with Jordan, Egypt and other relatively moderate Arab states, want to revive their 2002 declaration, and perhaps render it more appealing to Israel. There have been reports that the Arab leaders might draw on the Geneva accord, last year's "model" peace deal formulated by a group of left-wing Israeli politicians and their Palestinian counterparts.

If the Arab League follows this course, such an initiative might just offer a means for the Palestinians, with wider Arab backing, to begin to escape from Mr. Arafat's malevolent shadow, and for Israelis, preparing for a unilateral withdrawal from Gaza and parts of the West Bank, to instead begin a process of agreed territorial compromise with the ultimate prize of regional normalization.

Since it was completed last fall, the Geneva accord has signally failed to achieve its stated purpose — to persuade the mutually mistrustful sides that the enemy might be amenable to a viable accommodation. But the antipathy in some cases has more to do with the personalities involved than with the content of the agreement itself. For example, the leading role of Yossi Beilin, a former justice minister and perceived apologist for Mr. Arafat, has generated particular opposition from Israelis.

That's unfortunate. In substance, the Geneva accord has its virtues. Though it awards sovereignty on the Temple Mount to the Palestinians and posits a full territorial withdrawal (something that's deeply troubling to me and many Israelis), the agreement does appear to give Israel discretion over how many refugees from the 1948 and 1967 wars it would absorb, if any at all. This is a vital concession, and one that would allay the Israeli fear of being overwhelmed as a Jewish state by an influx of millions of Palestinians. Were similar proposals championed by mainstream leaders rather than marginal politicians, they could represent at least a starting point for new dialogue. (President Bill Clinton's farewell peace terms, incidentally, also essentially awarded the Temple Mount to the Palestinians, leaving Israel with only theoretical sovereignty beneath the surface.)

After three-and-a-half years enduring a strategic terrorist onslaught that has seen Palestinian suicide bombers kill innocents in almost every city, Israelis are desperate for liberation from the constant fear of being blown to pieces. Dissatisfaction with Mr. Arafat and his deliberate expansion of violence, meanwhile, is mounting among Palestinians, including many in Mr. Arafat's Fatah faction. Far from winning additional territory for the Palestinians, the intifada has led Israel to retake control of the West Bank cities it relinquished under the Oslo accords in the mid-1990's and to hasten the construction of its massive West Bank security barrier. In a cry for constructive leadership, 120,000 Palestinians and 160,000 Israelis have affixed their signatures to a broad platform for peace promoted by Sari Nusseibeh, a Palestinian academic, and Ami Ayalon, a former head of Israel's Shin Bet security service, with far less international backing than the Geneva proponents enjoyed.

This is where President Bush comes in. Yes, it's an election year. And yes, presidents battling for re-election tend not to deepen their involvement in the Israeli-Palestinian quagmire. But if Mr. Bush were to direct the State Department to urge Arab leaders in the days ahead of the summit meeting to try to formulate attractive peace terms, there is more than a faint possibility that both the collapsing Palestinian Authority and the increasingly unstable Sharon government might want to take a fresh look at a revamped Beirut Declaration. This is not a stretch. After all, the administration has already intimated some support for Geneva-style thinking as a basis for negotiation: Secretary of State Colin L. Powell met with some of the framers last year, and Mr. Bush praised the accord as potentially "productive."

As things stand, the administration finds itself in a bizarre position. After years of urging Israel to stop building settlements, the United States is now imploring Mr. Sharon to reconsider his unilateral proposal to dismantle the settlements of the Gaza Strip for fear that Hamas and other terrorist groups would fill the vacuum left by an uncoordinated Israeli withdrawal. Would it not be better to have Mr. Bush help Mr. Sharon leave Gaza by agreement — agreement not merely with the failed Palestinian Authority, but also with the wider Arab world, and with every outside player pledging enthusiastic backing? A coordinated effort on this, the most inflammatory of conflicts, could in turn help foster a broader improvement of American-Arab relations, changing the dynamic in ties with the Saudis, perhaps even the Syrians too.

The risks of engagement are significant for Mr. Bush. But, as the growing despair, hostility and bloodshed in the region make plain, so too are the dangers of inaction.

David Horovitz, editor of The Jerusalem Report, is the author of "Still Life with Bombers: Israel in the Age of Terrorism."