It's not a declaration of war. It's a declaration against terror

Israeli Foreign Minister Shimon Peres

As ever, the Israelis and Palestinians find themselves locked into a vicious circle of attacks and counter-attacks, killings and revenge killings.

But the stakes have been raised with the use of heavier weapons by both sides.

And the exchanges of mortar and tank fire are drowning the calls for the two sides to return to the negotiating table.

In warfare, or anything close to it, neither side wants to be seen as the one pulling back.

Election pledge

Palestinian children in the ruins of Khan Yunis refugee camp

For Ariel Sharon the use of tanks and helicopters is merely an expression of his determination, as he euphemistically put it recently, to use the language that the Palestinians will understand.

He came to power with the promise of cracking down hard on the uprising and is clearly determined to live up to his word.

The Israeli prime minister is unlikely to call off the army until he gets some kind of indication from the Palestinian leadership that they will scale back the violence from their side.

But for Yasser Arafat and his advisers these are difficult days indeed.

A Palestinian throws a Molotov cocktail

Such is the anger among the Palestinians and so great has been the suffering and disruption to daily life thus far that there is no mood for showing a white flag.

The Palestinians, ludicrously outclassed in terms of fire-power, know that they can keep the conflict going at the current level for some time to come - hoping in the process to cause enough discomfort to Israel to encourage public opinion there to turn against the policy of confrontation.

Looking to Washington

If, as seems likely, the undeclared war continues in the days and weeks ahead, both sides will be looking to Washington to try to break the vicious circle of violence.

In order for there to be discussions that will lead to peace, first and foremost, the violence must stop

President George Bush

So far, President George W Bush has indicated that he wants to be more detached than Mr Clinton was from the search for Middle East peace.

Instead, he wants to focus on Iraq.

But a point is likely to come when the Bush administration will no longer be able to turn a blind eye to the escalating violence in the West Bank and Gaza Strip.

Already America's allies in the Arab world - especially the all-important oil-producing states - are becoming increasingly irritated by what they see as Washington's failure to restrain Israel and its use of heavy weapons against the Palestinians.

Inherent good will towards the United States is wearing thin.

But until that point comes, the list of casualties will grow as the Israelis and Palestinians continue a conflict that is a war by any other name.

Gerald Butt is senior editor of Middle East Economic Survey (MEES)