HOW CAN NATIONS RESPOND to terrorism? This is a crucial question, particularly as Israelis come to terms with losses caused by the recent tragic bombings there.

Can high-profile meetings like the one this week in Egypt do any good? Perhaps, if the agenda includes the need for political as well as police responses to terror. For starters, it will help Israeli Prime Minister Shimon Peres if his people see, once again, the breadth of other nations' support for him and for his party's peace diplomacy.Somewhere behind the summit's glare, police chiefs and counterterror experts from various nations were also busy, in an effort to increase their coordination. But police work alone can never solve the political problems that underlie deep conflicts. Too often, "police measures" can get tangled up with another understandable response to terror - the urge for punishment and revenge. When that happens, the cycle of violence and counterviolence can rapidly spin out of control.

There is a real danger that the Israeli government's imposition of broad collective punishments, including blockades around Palestinian villages and possible delays in previously agreed troop pullbacks, could lead to such a spiral.

That's a pity, because many in Israel already know the need for restraint. They know that the massive use of force in Lebanon did not wipe out the problems there but left 1,200 Israelis (and 19,000 Arabs) dead. They know that all the repression used during the intifadah (uprising) in the occupied territories only deepened Palestinians' yearning for independence.

Personally, I would nominate for a Nobel Peace Prize the biggest hero who has emerged so far in response to the recent terror campaign: Leah Rabin, Yitzhak Rabin's widow. She has spoken out forcefully for further pursuit of peace and against the racist anti-Arab incitement that enjoys a worrying degree of public "legitimacy" in Israel.

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In the 1760s, it still was possible for the British and their colonists to wage brutal war against the American Indians and ultimately to win a decisive victory. In the Middle East, however strong the country's arsenals, no Israeli leader could ever hope to win a similar final "victory" over the Palestinians. Reason dictates that some form of coexistence will be necessary. And, if this coexistence is to be stable, it will have to be built on mutual interests and respect.

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