The Iraqi invasion of Kuwait was good news for two Middle East players who may not be able to agree on anything else -- Israelis and Palestinians

Privately, according to CIA and State Department analysts, the Israelis feel they are now off the hook in the peace process because an Arab nation has once again shown its violent side. The Palestinians have no respect for the royal family of Kuwait and feel they now have one more Arab nation as an ally now that Iraq is calling the shots in Kuwait.

Washington is notoriously a one-crisis town, and before Iraq's Saddam Hussein changed the subject, that crisis was trying to bring the recalcitrant Israelis to the bargaining table with their Arab neighbors.

Israeli leaders are already capitalizing on Hussein's distraction. State Department cables show that they are once again insisting to U.S. officials that they are the only reliable U.S. ally in the Middle East. Most of the rest are either America's enemies or are ripe for takeover by those enemies.

For several years, Israel has been trying to sour the United States on Iraq. Israel secretly supplied weapons to Iran during the Iran-Iraq war and helped engineer the U.S. arms-for-hostages deal with Iran. As bad as the Ayatollah Khomeini was, Israel believes Saddam Hussein is worse -- a ruthless, lying dictator who hates Jews.

The Iraqi invasion of Kuwait reinforces everything Israel has been saying. Now the Israelis are saying the only thing Arabs understand is force, not negotiations. Even the visit to Iraq of Egyptian President Hosni Mubarak before the invasion failed to deter Hussein. He merely lied to Mubarak and said he would not invade.

President Bush and Secretary of State James Baker have resisted any Israeli notion of intervening in the Persian Gulf in the past. U.S. officials prefer to push Israel to the table with its Arab adversaries, beginning with the adversary at home, the Palestinians. But Iraq has made it difficult to sustain the notion of talk being better than action.

An aggressive Iraq forces Israel to prepare to defend itself while telling Bush that he should be standing firmly behind them instead of asking them to make concessions in the face of aggression.

The Iraqi invasion proves Israel's point, that the United States has no real power to influence anything that happens in the Arab world from oil prices to peace.

What's good for Israelis is never good for Palestinians, but Hussein may have delivered the exception. The Palestinians are just as happy about the invasion as Israel.

The Kuwaiti royal family has never been popular with the Arab on the street. For that matter, neither have the other royal families in the Gulf nations. Commoners have suffered in silence for decades while the rich oil sheiks get richer and their progeny squander the public treasury on frivolous lifestyles.

Kuwait has compounded that acrimony with Palestinians by being a cheapskate when it came to funding Palestinian causes. While Palestinians languished in refugee camps, Kuwait invested its money in the West and sent hundreds of thousands of its young people to foreign universities where they lived on the royal dole. Palestinians even complained to us that cosmetic surgery -- particularly the nose job -- has become a standard part of the Kuwaiti student medical coverage.

The small extravagances weigh on the impoverished Palestinians who now figure that an Iraqi puppet regime in Kuwait will be a better supporter of Palestinian causes than was the royal family.

For those reasons, the Palestine Liberation Organization did not rush to denounce the occupation of one Arab nation by another, especially when the invader, Hussein, has allowed the PLO to all but set up permanent housekeeping in Baghdad in recent months.

The reasoning by Israel and the PLO, flawed as it may be, means that the hope for peacefully resolving their differences has been set aside. The Israelis will benefit the most from continuation of the status quo. They will not have to give up any of their lands for a Palestinian homeland, and they will have more evidence to drive home their point to the Bush administration -- that to invest anything in the Arab nations is a waste of time.