By Barbara Plett in Beirut

A Saudi initiative once billed as the last and best chance for peace in the region has been overshadowed by the hostilities it is meant to address, and by internal political rivalries that have always plagued the Arab League.

The proposal offers Israel security and normal relations with the Arab world in exchange for a full Israeli pull-back to the borders that existed before the 1967 Arab/Israeli war.

But the absence of key players threatens to water down its impact.

Saudi Crown Prince Abdullah's plan is an appeal to the Israeli people

Yasser Arafat remains grounded in the West Bank by an Israeli travel ban, and key moderate Arab leaders - Egypt's President Hosni Mubarak and Jordan's King Abdullah - have boycotted the summit in protest.

And, despite the usual Arab rhetoric of solidarity, Mr Arafat's speech by video link from Ramallah was not broadcast to the summit, prompting a Palestinian walk-out.

The Saudi initiative is not so much a negotiating position as an appeal to the Israeli people over the head of their government.

Right time?

It is a message to convince them that peace is possible with the Arab world, to encourage them to pressure the reluctant Israeli authorities to pull back to the 1967 borders.

Israeli analysts and officials have expressed interest in the vision of normal relations. It is a phrase hotly disputed by some Arabs, but ultimately chosen to appeal to Israel's psychological need to be part of the neighbourhood rather than just end the conflict.

The Arab League is often fractious

But Israel's refusal to allow Mr Arafat to back the initiative in person could strengthen arguments that now is not the time to make a peace gesture.

It could deepen rather than bridge Arab divisions. Reports say a second proposal backing the intifada and listing demands for Israel is circulating.

And it could call into question the Arabs' diplomatic strategy, which is based on American intervention. The Americans, after all, couldn't even get the Israelis to set Mr Arafat free from confinement in Ramallah.

Israel says he must declare a cease-fire before he can travel freely.

Palestinian fury

An Egyptian official said Mr Mubarak stayed away because he was angry with the Americans for not doing more.

Mr Arafat's live broadcast was not shown at the summit

The pall cast by Mr Arafat's absence turned to Palestinian fury when he was not able to broadcast live to the summit. Some Palestinian officials blamed Lebanon for blocking the signal.

It was not immediately clear what had happened or why, but the incident blew apart any appearance of unity in the often fractious Arab League.

Mr Arafat has gained in some respects, though, at least in the short term.

He has resisted the Israeli and American cease-fire demands that are opposed by his people - and that plays well to the street. Furthermore, the US is not publicly criticising him.

Israeli position

Most Palestinians believe the Saudi initiative is just another in a long history of empty Arab gestures, 80 per cent recently surveyed said they expected the summit to issue "worthless" resolutions.

That may be too harsh. Arab commentators have toned down their expectations, but some say the proposal will be useful even if it does no more than clear up doubts that the Arabs are ready for peace and put the onus on Israel to respond.

And that's been the plan all along.

The Arabs are well aware that the current Israeli Government is opposed to pulling back to the 1967 borders.

Israeli officials have long argued that they need to keep some occupied land for security reasons. They believe UN resolutions give them that option, although that's a minority view.

"We want to live in peace and security and if they [Israelis] don't accept [the peace offer], we will have exposed them," the plan's author, Saudi Crown Prince Abdullah, said recently, quoted by the state news agency.

"We will have shown the whole world that it is the Arabs and Muslims who want peace whereas some - I don't say all - Israelis don't want peace."