The shared hope of Israeli and Palestinian moderates has been that the Iraq war would finally propel their peoples back to the peace process they abandoned two years ago. The destruction of Saddam Hussein's regime, they imagine, could demoralize Palestinian extremists and help empower a new pro-peace cabinet under Prime Minister Abu Mazin. Meanwhile President Bush would fulfill his prewar commitment to Tony Blair by finally putting political muscle behind his own "vision" for a Palestinian state -- even if that meant a clash with Israeli Prime Minister Ariel Sharon.

The dream could still come true. But the news of the past week also has given the pro-peace camp a nightmare scenario to contemplate -- one in which the United States, rather than extricating Israel from its quagmire in the West Bank and Gaza, joins it as an isolated occupying power fighting off suicide bombers.

It wasn't just the suicide attacks on successive days -- the first in central Iraq and the second in central Israel -- that evoked that gloomy specter. There were also the signs of entrenchment by Sharon's government against the "road map," the multilateral plan for an Israeli-Palestinian peace that Bush recently endorsed at Blair's behest -- and the emerging split between London and Washington over whether the United Nations, as opposed to the Pentagon, will oversee the formation of a new Iraqi government.

Even as U.S. and British forces closed in on their joint military objectives, it appeared the allies were contemplating widely diverging paths for the postwar Middle East. Along one lay Blair's vision of a U.N.-sanctioned reconstruction of Iraq joined by the European Union and possibly NATO, and an Israeli-Palestinian settlement brokered by the "quartet" of the United States, European Union, Russia and the United Nations. The other begins with a postwar Iraq managed exclusively by the United States, as sought by the Pentagon's hawks. With the bond to Blair's agenda broken, U.S. policy would no more be governed by the "road map" than by the Security Council. A U.S. showdown with Syria or Iran would be more likely than one with Israel.

It's not hard to figure out which side of this debate Sharon is on. Last week his new foreign minister, Silvan Shalom, was in town to rally opposition in Congress and the Jewish community to the road map -- and to begin the familiar process of diplomatic trench warfare by which Middle East peace initiatives are blocked. Like Sharon, Shalom assured his audiences that Israel "accepts" Bush's "vision" of side-by-side Israeli and Palestinian states. But he insisted that a few amendments need to be negotiated in the road map -- a demand that quickly became the rallying cry of Israel's friends in Congress.

State Department veterans of Arab-Israeli negotiations know well where this leads: toward a quagmire of endless negotiations in which both Israelis and Palestinians come forward with dozens of textual changes to a procedural document (Israel has prepared more than 100). Talks about talks then substitute for actual negotiations, not to mention concessions on the ground. Just this prospect prompted Powell to announce last week, as Shalom's visit began, that the road map would not be opened for amendments -- a position that may or may not stand.

Sharon's defenders insist that he genuinely wants a peace accord with the Palestinians. So why the well-worn stalling tactics? Because, as Shalom made clear, his Likud Party still stoutly opposes the first major concession required of Israel, which appears in the road map's opening phase: a freeze on further Jewish settlement of the West Bank and Gaza. Asked in a meeting at The Post whether Israel would accept a freeze, Shalom repeated the Likud's longstanding position that "natural growth" of settlements must continue -- a cover under which their numbers and size have been vastly expanded over the years. "I don't see the problem that the settlements will remain where they are even if there is a provisional Palestinian state," Shalom added.

Shalom understands very well the politics of the postwar policy debate -- which is why he squarely attributes the trouble over the road map to Blair. "The idea of the road map was brought here from Europe, so maybe it's not the same as the president's vision," he said. In private, Israeli officials are even more blunt. "It's not a secret," said one, "that Tony Blair and the Europeans are pushing very hard, and the administration will have to decide what in the future is in America's interest."

Along one route, as the Israelis see it, is cooperation with Blair's vision of a non-negotiable road map, along another continued comity with Sharon. As the gears of the postwar Middle East engage, abandonment of the multilateral road map would likely mesh with a unilateral American administration of Iraq. Both risk a deeper breach with European allies, maybe even with Blair himself, and an Arab backlash against the United States that builds rather than wanes after the war. It might not all turn out that way -- a more muddled result is likely. But that is the nightmare that now haunts the dream of a postwar peace.