All of the suffering in Gaza - indeed, all of the suffering endured by Palestinians under Israeli occupation for the last eight years - could have been avoided if Israel negotiated a peace agreement with Yasser Arafat when it had the chance, in 2001.

What chance? The official Israeli position is that there was no chance, "no partner for peace." That's what Israeli leaders heard from their Military Intelligence (MI) service in 2000 after the failure of Israeli-Palestinian negotiations at Camp David. Arafat scuttled those talks, MI told the leaders, because he was planning to set off a new round of violence, a second intifada.

Now former top officials of MI say the whole story, painting Arafat as a terrorist out to destroy Israel, was an intentional fiction. That's the most explosive finding in an investigative report just published in Israel's top newspaper, Ha'aretz, by one of its finest journalists, Akiva Eldar.

Tale of Two Tales

Much like our own CIA, Eldar's sources say, Israeli military intelligence has two versions of every story. MI analysts give their findings to government policymakers in oral reports that simply tell the political leaders what they want to hear. Meanwhile, the analysts keep the truth secret, filed away in written documents, waiting to be pulled out to cover MI's posterior if the government's policies turned out to be failures.

Much of the information in the Ha'aretz report comes from Ephraim Lavie, an honors graduate of Israel's National Security College who rose through the ranks in MI's research section and eventually became head of MI's Palestinian research unit during the era of the Camp David talks. "Defining Arafat and the PA as 'terrorist elements' was the directive of the political echelon," said Lavie. "The unit's written analyses were presenting completely different assessments, based on reliable intelligence material."

The idea that "there is no one to talk to and nothing to talk about," simply because Arafat rejected the Israeli offer at Camp David, just wasn't true. But it was what the politicians wanted to hear.

Journalist Eldar found others who had worked inside MI to corroborate Lavie's story. General Gadi Zohar, who once headed the MI terrorism desk, agrees the heads of the MI research unit "developed and advanced the 'no partner' theory and [the notion] that 'Arafat planned and initiated the intifada' even though it was clear at that time that this was not the researchers' reasoned professional opinion."

In fact, these intelligence veterans say, MI concluded after Camp David that Arafat was willing to follow the Oslo process and abide by interim agreements. He wanted to keep the negotiating process alive, and even told his staff to prepare public opinion to accept an agreement that would include compromises. He thought violence would not help his cause. In late September what year?, when violence did erupt in a second intifada, it was purely a popular protest, MI found. Arafat and his advisors never expected it, much less planned it.

They did let the violence go on, to put pressure on the Israelis in future negotiations. But Israeli leaders had already made it clear they would make no more compromises. That's exactly why MI invented the story of Arafat's intransigence and commitment to violence; MI was giving the political leaders oral briefings that supported policies the politicians had already agreed on. As Lavie puts it, the MI research unit was an instrument in the politicians' propaganda campaign.

"The conception underneath the 'no partner' approach became a model with grave national implications," Zohar points out. The most serious result, says Lavie, is that Israeli leaders have "ignored the connection between Israel's acts and their implications for the Palestinian arena." Instead, they repeated the old story that Israel is an innocent victim of the Palestinians, who are bent on unprovoked violence.

MI told Israel's leaders the violence was all Arafat's fault, hiding what it knew about broad popular support for acts of resistance. By undermining the power of Arafat, Fatah, and the Palestinian Authority, Israeli leaders created a governmental vacuum. They then turned around and said, "See, we have no one to negotiate with, no partner for peace." Instead, Israel responded to the intifada with heightened violence of its own, which of course provoked even more Palestinian popular resistance and even more Israeli suppression. So the vicious cycle of violence kept spiraling ever downward.

Rise of Hamas

The combination of Palestinian political vacuum and Israeli violence also boosted the fortunes of Hamas, another development that MI kept hidden from Israel's political leadership, according to this report. To reinforce the "no partner for peace" story, MI treated Arafat as the only significant political force on the Palestinian side. So it ignored the growing power of Hamas. The MI unit predicted a tie between Hamas and Fatah in the January 2006 Palestinian election, or at most a tiny advantage for Hamas. Hamas, of course, won a major victory in an election outside observers found free and fair.

All of this, say Eldar and his sources, is crucial background for the tragic Israeli relationship with Gaza. The MI oral briefings (to repeat Lavie's crucial words) "ignored the connection between Israel's acts and their implications for the Palestinian arena." So they encouraged Israel's leaders to believe they could separate their own nation from the neighbors they continued to control. In the West Bank they began building a physical wall. In Gaza they withdrew their occupation troops, hoping to leave Gaza to live or die on its own. The leadership simply ignored the possibility that Hamas might be strong enough to gain popular control in Gaza.

The evacuation from Gaza was tied up with a larger strategy, again spurred by telling leaders what they wanted to hear. When the Bush administration endorsed the so-called Road Map for Middle East peace, MI told the Israeli government not to take it seriously; it was just an American public relations gesture to mollify the Arab states. Israeli leaders were unprepared when it turned out that Washington expected Israel to take the road map seriously.

The Israeli prime minister at the time, Ariel Sharon, then announced his plan to withdraw Israeli troops and settlers from Gaza. He hoped to avoid pressure from Bush to continue negotiations. Sharon's senior advisor, Dov Weissglas, famously said that "the disengagement [from Gaza] is actually formaldehyde. It supplies the amount of formaldehyde that is necessary so that there will not be a political process with the Palestinians...This whole package that is called the Palestinian state has been removed from our agenda indefinitely."

Gaza Today

But the message to Hamas was that Israel would act unilaterally, refusing to negotiate with the ascendant Palestinian party. Instead, the Israelis would rely on brute force. Tragically, as the events of the past two weeks have shown, the level of force just goes on escalating. Hamas, like any political party, has both moderate and intransigent wings. Israel's policies have consistently undermined the moderates, who would want to pursue negotiations if they saw any chance. Israel has denied them that chance, leaving violence or surrender as the only options. And Israel's underestimation of the power of Hamas power is still proving a fatal mistake.

But if these new revelations are true, the policy of unilateralism and brute force didn't originate with Sharon and his right-wing Likud Party. It goes back to 2000, when the Labor Party, headed by Ehud Barak, refused to agree with Yasser Arafat that the path of negotiation - as difficult and tedious as it was - should be pursued to a successful end. The one attempt to revive the negotiations, at Taaba in early 2001, collapsed when Barak withdrew.

Today Barak, as the Defense Minister in charge of the Gaza attack, sees his once-fading political fortunes rapidly rising again. Most of the Israeli public still believes what MI tells the political leaders in briefings often leaked to the press: Israel is a helpless victim of Palestinian violence, violence that Israeli policies did nothing to provoke. But now it looks like analysts in Israel's own Military Intelligence service have long known how false this story is, according to former top MI officials.

When the story appeared in Ha'aretz in early January, it drew a quick rebuttal from General Yossi Kuperwasser, former head of the MI research unit: "MI never adjusted its assessment to what the leadership wanted." Of course if the charges are true, that's just what would be expected: an official public story at odds with the privately known truth.

On the other hand, it's possible that Eldar has uncovered the trail of an old internal dispute within MI. Speaking of the time when the Camp David talks collapsed and the second intifada began, Kuperwasser says: "I assume that all the assessments about Arafat's behavior in August and September 2000 were written by Lavie. In Central Command, where I was then serving as the intelligence officer, our assessment was that the Palestinians were bent on a confrontation." In other words, the experts in the Palestinian section of MI, headed by Lavie, saw Arafat as a potential partner for peace but their superiors reversed the assessment.

But even if only some key Israeli intelligence officers believed negotiations could yield a positive outcome, that news should be a shocking revelation. Yet in a Google News search a few days after the article appeared, found not a single mention of it anywhere in the world's news media, and certainly not in the United States, where it matters most. It matters most here because Israel can't continue its military action without at least a tacit green light from Washington. Washington can give that green light only as long as the American public raises no serious objection. The public here isn't likely to object as long as the basic plotline of Middle East news coverage remains the same; namely, that Israel attacked Gaza in self-defense.

Though U.S. news coverage isn't as wholly sympathetic to Israel as it once was, the Israelis still managed to make their version of the story central to mainstream media coverage. Millions of Americans who know nothing else about the still ongoing conflict believe that the Israelis are "retaliating against Hamas rockets." What if those millions also knew the Israeli government ignores its own intelligence experts when they say Palestinian leaders are willing to make peace? That might change the entire picture of the Arab-Israeli conflict - and push Americans to push their government to push Israel to negotiate in good faith a peace deal with the Palestinians.