World leaders have been saying the death of Yasser Arafat has presented a new chance for peace in the Middle East. In this report from Jerusalem, VOA's Sonja Pace looks at prospects for peace now following the passing of the only leader the Palestinians have ever known.

More than four years of almost daily violence has left more than 3,000 Palestinians and over 1,000 Israelis dead. Thousands more have been wounded and maimed. Repeated diplomatic efforts and peace proposals had gone nowhere. But just when it seemed the world's attention was elsewhere, things changed.

Yasser Arafat died and the man vilified by Israel and the United States as an obstacle to peace was gone and it seemed a door had opened.

"My hope is that we will make good progress," said President Bush. "I think it is very important for our friends the Israelis to have a peaceful Palestinian state living on their border. It is very important for the Palestinian people to have a peaceful, hopeful future."

What President Bush was referring to was the internationally-backed "road map" peace plan which calls for a step-by-step approach leading to an independent Palestinian state in 2005.

Israel and the United States had long accused Mr. Arafat of supporting violence and broke off all contact with him. Palestinians never accepted that position but now with a new leadership about to emerge they are saying its time for America and Israel to come back to the table.

"Mr. Yasser Arafat was declared irrelevant and not a partner by the Israelis and the Americans," said Mahmoud Labadi, the Director General of the Palestinian Legislative Council. "Hopefully, they will change their position and they will start to talk to the new Palestinian leadership."

The first steps have been taken. Secretary of State Colin Powell made his first trip in 18 months to the region in November. Senior European diplomats followed suit.

Israeli Prime Minister Ariel Sharon is also speaking of brightened prospects for renewing the peace process and by early December was expressing more optimism that perhaps he had found a Palestinian partner he could deal with. He said if the Palestinian Authority leaders continue to work to rein in the militants - the outlook would be bright.

The interim Palestinian leadership, under former Prime Minister Mahmoud Abbas, tried to calm the situation and only sporadic clashes between militants and Israeli troops have occurred.

Mahmoud Abbas

But, Mr. Abbas still must tread carefully. He lacks the strong popular support needed to go up against the militant groups. He is running in the January 9 elections for president of the Palestinian Authority but even if he wins, he will still face formidable obstacles consolidating his position and bringing unity among Palestinian.

Ariel Sharon has political troubles of his own. His unilateral plan to withdraw from the Gaza Strip and small portions of the West Bank in 2005, faces major opposition which could still bring down his government and force new elections.

With such challenges ahead is it realistic to expect progress? Shlomo Brum, senior political and security analyst with the Jaffee Center for Strategic Studies in Tel Aviv, says "maybe," if steps are taken soon.

"The first thing they should do is implement the disengagement plan in a cooperative manner," he said. "The second thing is enable processes that will give legitimacy to the new Palestinian leadership and that means first of all elections. The third element is looking together for ways to integrate the implementation of the disengagement plan into the road map as part of the first stage of the road map."

British Prime Minister Tony Blair says the opportunity cannot be missed.

"I think the next period of time is absolutely crucial," he said. "If we don't seize this opportunity now it may not come for us again."

Now it is up to the Israelis and Palestinians.