Even with this large caveat, I do not believe that Sharon's absence would prove to be the crucial stumbling block. That's because the great obstacle to progress in the Middle East is no longer Israeli intentions but rather Palestinian capabilities. The big story that no one wants to admit yet is that the Palestinian Authority has collapsed, Gaza has turned into a failed state and there is no single Palestinian political organization that could create order in the territories and negotiate with Israel. Palestinian dysfunction is now the main limiting factor on any progress in the peace process.

There were many hopes that Gaza could become a model of what the Palestinians would do once liberated from occupation. Last week The Christian Science Monitor reported on the new scene: "As the first year devoid of an Israeli presence since 1967 dawns," it wrote, "armed militias roam the streets freely, foreigners are kidnapped with regularity, and the measure of a man in this coastal territory is not his political title, or even the size of his house, but the number of AK-47-wielding bodyguards he employs."

Some of these problems are not all of the Palestinians' making. Israel has ruled them harshly and disrupted their political and economic life, and some of these disruptions continue even in Gaza. Goods have to be loaded and unloaded at checkpoints, people checked and rechecked, all of which imposes huge costs on normal activities.

The Lebanese army caught a boat on its way to Israel last week that was loaded with weapons, including long-range missiles, Channel 1 revealed Thursday night.

According to military sources who confirmed the report, the boat was on its way to Gaza from Lebanon and planned to drop off canisters filled with weapons, explosives and rockets off the coast where they were to be collected by Palestinian fishermen.

Government officials speculated that the boat was funded by Iran or Syria and that the weapons were meant to reach either the Hamas or the Islamic Jihad in the Gaza Strip.

In 2002, the Karine A ship was captured in the Red Sea by special IDF forces. The boat's cargo, intended for the Palestinian Authority, included 50 tons of advanced weaponry including Katyusha rockets, rifles, mortar shells, mines and a variety of anti-tank missiles.

"There are attempts to smuggle weapons into Israel all the time," one official said. "They will do anything they can to get weapons here which they can use in attacks against Israel."

According to Lebanese media reports, the boat - together with four passengers - was caught off the southern port of Tripoli. The boat's point of origin was a dock at Naher Al Bard - a nearby Palestinian refugee camp...