With the process itself so conspicuously fragile, public discussion of any substantive questions has been taboo; it was only by avoiding the real issues that Secretary of State James Baker was able to persuade the players to come to the conference at all. “Delving into details, sir, is a fatal flaw,” cautioned Jordan’s King Hussein in a recent talk with NEWSWEEK. Last week’s maneuvering perfectly illustrated the difficulties. Israel and its adversaries repeated their hard-line positions, played procedural games and brought the conference close to collapse before it had begun. Israeli Prime Minister Yitzhak Shamir decided to lead his own delegation, leaving his relatively dovish foreign minister, David Levy, to fume in Jerusalem. A member of the joint Jordanian-Palestinian delegation said matter-of-factly that he and the other Palestinians were “chosen by the PLO,” infuriating Shamir, who refuses to talk to the Palestine Liberation Organization. Syria’s President Hafez Assad meanwhile lobbied the other Arab representatives, trying to persuade them to harden their own positions. The comprehensive settlement that all say they want seemed distant indeed.

Behind the scenes, however, speculation about the shape of a final settlement has quietly taken some intriguing turns. President George Bush said in March that peace in the region would have to be based on U.N. Security Council Resolutions 242 and 338, which call on Israel to withdraw its armed forces from territories occupied in 1967 in return for “recognized boundaries free from threats or acts of force.” Assad has said this is the only valid basis for talks; officially, all the Arab delegations concur. But administration officials admit privately that while Israel will have to give back some land under this formula, there’s no way it is going to withdraw to pre-1967 borders. “There is going to have to be a fair degree of flexibility on our part, a willingness to search for creative solutions,” concedes a senior State Department official.

The most creativity will be needed in the talks between Israel and the Jordanian-Palestinian delegation. Israel and Palestine are one land claimed with fierce conviction by two peoples. Although the mainstream PLO has accepted the proposition that two states can live side by side-with Palestine in the current occupied territories– both Arab and Israeli hard-liners maintain that legitimizing one strips legitimacy from the other. Academics and senior government officials in the Mideast have been mulling this riddle for years. Gidon Gottlieb, a fellow at the Council on Foreign Relations, has tried to find some common ground between these views. Gottlieb’s own word for what he and others are trying to do is “deconstruct” the notions of sovereignty, self-determination and statehood, in order to bypass some of the semantic hurdles that have become enormous obstacles. His suggestions build on much of the quiet, creative thinking that has gone on over the last few years-ideas that just might meet the demands, if not the desires, of all sides:

Israel would no longer rule the 1.7 million Palestinian Arabs in the West Bank and Gaza. Administration officials believe the Shamir government is eager to give the Palestinians some responsibility for administering the territories-as long as these arrangements don’t commit Israel to actually surrendering any of the land.

Jordan, the Palestinians and perhaps Israel as well would form a confederation. Both Yasir Arafat and Yossi Ben-Aharon (Shamir’s hard-line chief of staff and a Madrid delegate) have embraced this idea in the past. A more plausible confederation: between Jordan and the Palestinians.

While Palestinians exiled from their homes by the 1948 war would not be allowed to return to them, they could be offered compensation. A dual system of passports for Palestinian “nationals,” as distinct from “citizens” who are resident in the territories, might be arranged.

One of Israel’s strongest reasons for holding onto the West Bank has been military security. A peace settlement would lessen those worries, but agreements would have to allow Israeli troops to be stationed and to patrol in certain areas. Arafat, in the past, has said he would agree to “every conceivable condition to guarantee Israel’s security” in the context of an overall settlement.

Jerusalem, the most difficult question, would be left to last. But, given a working “confederation” among Jordan, the Palestinians and Israel, it could become a “capital district” for all three.

Such plans-as flawed and implausible as they seem at first-have a special relevance today, when the whole concept of fixed borders and nation-states is changing. A dozen years ago, when the Camp David accords first broached the issue of Palestinian “autonomy,” the idea seemed a miserly substitute for the dream of an independent state. But with the unification of Germany, the breakup of the Soviet empire and the dissolution of Yugoslavia, notions of autonomy, independence and self-determination have begun to appear as part of a spectrum, where the lines of demarcation are no longer absolute.

The Baker-designed process is meant to leave the way open to experimentation with such ideas. Based on the Camp David model, the negotiations are supposed to set up a five-year regime of limited self-government in the occupied territories (minus the “autonomy” buzzword at this point). Only in the third year would talks begin about final status. Says a senior Baker aide, “What appears impossible today may seem like a meaningful and practical solution tomorrow.”

Some Israelis believe an interim agreement might mean that existing Israeli settlements might not have to be removed. Amiram Goldblum, a Peace Now spokesman, argues that “In Estonia, the population includes 50 percent Russian settlers, but Estonia has achieved independence.” But American, moderate Arab and many Israeli officials recognize that if the Likud government continues building at the present pace, the Palestinians and Arab states will believe Israel is simply using the period as cover while paving over the West Bank.

The settlements may yet spark a new confrontation between Bush and Shamir. Israel’s request to Congress for $10 billion worth of loan guarantees for immigrant-resettlement costs was deferred, at Bush’s insistence, until early 1992. Administration sources say the White House is working on a plan that would support granting the guarantees, so long as the legislation stipulated that any money Israel spent to build new settlements would be deducted from the U.S. amount. The formula for assessing building costs remains to be worked out-but if the true costs (including roads, sewers, administration costs and mortgage loan subsidies) were deducted, the $10 billion would rapidly disappear. Such a formula, therefore, could be a powerful club.

At the same time, administration officials warn that the Arab states and Palestinians are going to have to be flexible, too. “The danger is, the Arabs are all expecting us to deliver Israel,” said a senior U.S. official. “If they think that relieves them of the responsibility to be creative and forthcoming, the talks could founder. We can’t deliver Israel–and certainly not in the absence of public support here and in Israel itself. Unless the Arabs also produce, we won’t have that public support.” The meeting in Madrid only makes peace possible. To make peace real, all sides will have to delve deeply–and dangerously–into details.