The latest Palestinian intifada (uprising) against Israeli rule was triggered by the frustrations of a failed peace process.

A year on, the cycle of violence is so firmly established that the resumption of peace talks seems only a remote possibility.

Neither Sharon nor Arafat wants to be blamed for derailing American-led efforts to defeat international terrorism. Perhaps a shaky ceasefire, under these circumstances, might eventually be turned into something more permanent

Ceasefires agreed on by the leaders of the two sides are inevitably short-lived. A mood of compromise is noticeably absent, with both the Palestinians and the Israelis seeing this as a contest to the finish.

But because it is an undeclared war that neither side seems likely to win outright, the prospect in the coming months must be for the cycle of events on the ground to go on deciding the course and intensity of the contest.

Clinton's big risk

Towards the end of his presidency, Bill Clinton took a big risk - pushing the two sides towards what would have been an historic compromise on the key emotive issues that divided them, most notably the fate of Jerusalem.

But by that time, too many Palestinians lives had been lost and too much destruction caused to the fabric of society.

Sharon promised, but has failed, to end the intifada

Much as Palestinian leader Yasser Arafat might have been tempted to sign a compromise deal, he knew that by doing so he would effectively have been signing his own death warrant.

Mr Arafat survives - just. But his prestige and that of the Palestinian Authority have suffered greatly over the past year.

Having failed to achieve an acceptable deal at the negotiating table, the Palestinian leader has vacillated between giving his support to the intifada and urging restraint.

Hardline groups prosper

The result has been massive Israeli retaliation on Palestinian towns, with no political gains.

As a result Mr Arafat has largely lost control of the radical Islamic groups who have shown that they are willing and able to sabotage any political deal that they deem to be unacceptable.

Arafat is still in power - but only just

And increasingly the hardline positions adopted by these groups are finding support among ordinary Palestinians in the West Bank and Gaza Strip who, aside from suffering from the direct effects of the violence, have seen their livelihoods disappeared, whether they worked in the towns and villages of the territories or as hired labour in Israel.

The peace process once promised prosperity. The Palestinians at one point were prepared to believe this. Few will do so again.

Disappointed in Sharon

For Israelis, too, the intifada has placed an economic as well as emotional strain on daily life.

More than 820 Palestinians and about 170 Israelis have been killed during the intifada

The tourism industry has collapsed and the supply of cheap Arab labour from the Palestinian territories has dried up.

But the biggest disappointment and worry for many Israelis has been the failure of Ariel Sharon to deliver on his promise to use force to stamp out the intifada.

Instead, Israeli forces find themselves trapped in a quagmire reminiscent of Lebanon.

At the same time, Israel is on the receiving end of more and more international criticism, even at times from its major backer, the United States.

Under such pressure the reaction of Israeli leaders - not least of Mr Sharon - is to stand their ground.

The idea of any kind of unilateral withdrawal from the current confrontation would be rejected for fear that it would be interpreted by enemies of the Jewish state as a sign of weakness.

Which is why this undeclared war looks set to continue - for the time being at least.

No winners

Perhaps the best hope is that in the aftermath of the 11 September bombings in the US, the international community might address the Arab-Israeli conflict as part of a process of eliminating the sources that provide pretexts for maniacal terrorists.

Neither Mr Sharon nor Mr Arafat wants to be blamed for derailing American-led efforts to defeat international terrorism.

Perhaps a shaky ceasefire, under these circumstances, might eventually be turned into something more permanent.

But without major new impetus for the peace process, and without offering the Palestinians what they regard as an acceptable solution, the intifada will continue.

And this means many losers - and little hope of a winner emerging.