If anything, the atmosphere was getting even more belligerent. “This is the most dangerous time in the Mideast in 20 years,” a senior White House official acknowledges. Within the occupied territories, U.S. and Israeli officials fear, Palestinians are growing so impatient with the lack of political progress that the uprising may escalate from stones to the use of guns and bombs. PLO chairman Yasir Arafat himself seems unable to challenge the rejectionists within the organization; externally he appears to be drifting closer to the hard-line Saddam Hussein. Jordan’s pro-Western King Hussein is edging in the same direction–a process that will be hastened if Soviet Jews begin pushing Palestinian families out of the occupied territories and into Jordan. Washington officials take limited comfort in the continuing enmity between Saddam Hussein and Syrian President Hafez Assad, which prevents Iraq and Syria from forming a solidly hostile bloc to Israel’s east. “You’re looking at the risk of a slow slide into war rather than a headlong rush,” said one U.S. intelligence official. “Nobody thinks there will be a war tomorrow. The problem is what governments of the region will do if they come to believe the peace process is doomed.”

The most frightening aspect of the Mideast confrontation is a lack of political constraints and recognized rules of engagement. “There’s going to be another massacre on the West Bank,” predicts one U.S. official, alluding to the killing of seven Palestinians by a Jew in Israel last May, “and it’s going to happen sooner rather than later. If it’s Jews killed by Palestinians, you know the Israeli settlers will take their own vengeance. If it’s another case of a bunch of Palestinians massacred . . . how long can the Arab governments stand by and just let that happen?” Another source speaks of “the great unmentionable”–a scenario so sensitive that U.S. policymakers “won’t even let the analysts [war game] it.” In that event, Israel would feel compelled to launch a “pre-emptive strike” against Iraqi military facilities, as it did in its 1981 bombing of the Iraqi nuclear reactor at Osirak. “The truth is, Israel is the wild card right now,” the source says. “Don’t let anyone fool you that we know what [Israeli Prime Minister Yitzhak] Shamir is planning. We don’t.”

Both sides are fine-tuned for conflict. “Seven of the 20 largest military establishments in the world are concentrated in the region,” notes Col. Joe Englehardt of the U.S. Army War College in Carlisle, Pa. In both scale and sophistication, the conventional weapons in the area approach the standards of NATO. Even more unsettling, however, are the short- and intermediate-range missiles in the region, missiles capable of carrying chemical weapons and, in Israel’s case, nuclear warheads. Unlike Middle Eastern tanks, guns and warplanes, these missiles are relatively crude. They are too inaccurate to be used as first-strike weapons against other missiles. Instead, as the unlucky inhabitants of Teheran and Basra discovered during the Iran-Iraq War, they are old-fashioned “city busters,” employed chiefly to cause civilian deaths. “Do the missiles represent a major change in military capability?” Englehardt asks rhetorically. “Probably not. The modern aircraft already in the region can deliver more ordnance with much greater accuracy than the missiles can. What the missiles change is the political equation.”

Gloomy optimists see the missiles in familiar East-West terms: as creating a deterrent balance of terror. In April, Saddam Hussein made it explicit. Reminding listeners of his chemical-war capability, he said, “By God, we will make fire eat up half of Israel if it tried [to strike] Iraq. " Western and Arab analysts believe Saddam’s bluster is principally defensive, underscoring his awareness of Iraq’s vulnerability to an Israeli attack. He has no intention, they believe, of launching his own first-strike against the Jewish state. The problem is one of perceptions: what if Arab leaders believed Israel was preparing a nuclear attack, or Jerusalem believed Saddam was close to developing nuclear weapons of his own? “Missiles give people the opportunity to react very rapidly,” says Phillip Karber, a conventional-weapons expert at BDM Corp., a major Pentagon consultant. “That means they can escalate a conflict very rapidly.” And, he adds, “given the unstable political environment in the region, in which emotions take precedence over rationality,” calculated deterrence may simply not work in the Middle East.

Military relations: Some experts see a potential flash point in Jordan. Through the 1980s, Iraq and Jordan have quietly cemented military relations: their air defenses are integrated; they share intelligence. With the Amman government nearly bankrupt, the Iraqis even help pay for Jordan’s Air Force. In July of last year, Iraqi fighter jets flew reconnaissance patrols along Jordan’s border with Israel. And Iraqi Army division commanders visited Jordanian units along the River Jordan obviously to inspect the terrain. Israel’s current nightmare is to find Iraqi missiles deployed in Jordan, where they would be capable of hitting any site in Israel. Both Jordan and Iraq “understand that, for Israel, the stationing of Iraqi troops in Jordan would be a potential reason for going to war,” says Seth Carus, a Mideast arms expert at the U.S. Naval WarCollege. But what if there’s a crisis, either imagined or real? For now, regional analysts are convinced that things will have to get worse before a serious peace process can resume. Until then the question will continue: what if?

Seven of the world is 20 largest military establishments are in the Mideast, and their weapons approach NATO standards. Though overmatched in raw numbers by both Iraq and Syria, Israel holds a technological edge and is thought to be the only regional power with actual nuclear warheads.

Conventional Military Forces COUNTRY MANPOWER TANKS ARTILLERY COMBAT AIRCRAFT. Israel 141,000 3,850 2,261 577 Syria 404.000 4,050 2,400 448 Iraq 1,000,000 4,500 4,485 500 Jordan 82,260 979 647 114 (*)INCLUDES NAVAL. SOURCE:B.D.M.