Ehud Barak, the leader of Israel's opposition Labour party, is certain that the government of Prime Minister Benjamin Netanyahu is about to fall. He's so certain, in fact, that he has ordered all his party activists to prepare for general elections next year, even though Mr Netanyahu's term is scheduled to end only in the year 2000.
What's more, Mr Barak, his country's most decorated military veteran, is so confident of victory that he's already been holding press conferences setting out what he'll do once elected - how he'll forge a "unity coalition" with members from across the political mainstream, how he'll impose national service on the draft-dodging ultra-Orthodox community and, most importantly, how he'll rebuild the shattered peace process with the Palestinians.
An intelligent, pragmatic man, who endorses the late premier Yitzhak Rabin's reasoning about the security benefits to Israel of well-founded peace treaties with the Palestinians and the Syrians, Mr Barak would probably make a highly competent prime minister. Unfortunately, however, his confidence in his own imminent election to the position may well be misplaced. For one thing, Mr Netanyahu may not be about to fall. For another, if he does, it may not be Mr Barak who would replace him.
The past 12 months have been thoroughly depressing for those, inside the region and observing from outside, who had hoped that the Oslo peace process begun by Mr Rabin and Yasser Arafat in 1993 could survive Mr Netanyahu's arrival at the prime minister's office in Jerusalem. If the year began with a hint of optimism, when the Likud leader reached an accord with Mr Arafat that saw Israeli troops withdraw from most of Hebron, the last Israeli-controlled city in the West Bank, it was downhill all the way after that.
US diplomats now privately acknowledge that they took their "eye off the ball" in the mild euphoria that followed the implementation of the Hebron deal. Instead of keeping up the pressure - on Mr Netanyahu to hand over more occupied land to the Palestinians; on Mr Arafat to keep a tight rein on the Islamic extremists of Hamas and Islamic Jihad - they allowed peace efforts to lose momentum. Mr Netanyahu slipped away to approve a new Jewish neighbourhood at Har Homah, on the southern edge of Jerusalem adjoining Bethlehem, Mr Arafat cut off peace talks, and the extremists, as ever, slipped into the vacuum: the Islamic radicals staged suicide bombings in Tel Aviv and Jerusalem (twice), in turn spurring settlers and their advocates to demand and gain government support for thousands more new Jewish homes on West Bank land.
The current depression stems from more than the collapse of faith and negotiations between Israelis and Palestinians, however. Mr Netanyahu has also steered Israel into a diplomatic crisis with Jordan - by green-lighting what turned out to be a bungled Mossad assassination attempt, involving a lethal chemical compound, on a Hamas official in Amman.
He has traded recriminations with Egypt's President Hosni Mubarak, failed to restart negotiations with Syria and presided over the collapse of the fragile diplomatic and trade ties that Mr Rabin's government was building with other neighbours like Morocco, Tunisia, Oman and Qatar. Most worryingly for Israel, his reluctance to implement UN resolutions on land for peace have badly undermined American efforts to win Middle Eastern support for pressure on Iraq to honour other UN resolutions. The Americans, Israel's vital allies, are not best pleased.
And yet, despite all this, despite an economy heading into recession because of the stagnation of peace efforts, and despite several scandals from which he has been lucky to escape without criminal charge, Mr Netanyahu remains only a few percentage points behind Mr Barak in the opinion polls. Head to head, given his undeniable TV charisma, and given the mass support he enjoys among Israel's fast-growing ultra-Orthodox and Sephardi Orthodox communities, he'd probably make up that ground and more in an election campaign.
While the Israeli public may be disinclined to jettison Mr Netanyahu, many people in his own Likud party are, ironically, rather more anxious to be rid of him. Ideally, they'll use the amended electoral laws to oust him without triggering new general elections. They've come close to doing so once already, when only disputes among the would-be rebels, as to who exactly would replace Mr Netanyahu, derailed the mutiny. Ultimately, the man most likely to cause Mr Netanyahu's downfall is Ehud Olmert, the mayor of Jerusalem, who has kept his seat on the Likud benches of the Knesset, was acquitted on fraud charges in the autumn, and is even less prepared than the prime minister for compromise with the Palestinians.
Looking ahead to 1998 then, we have a moderate Israeli opposition leader who would probably resuscitate peace hopes but who, in a country sliding inexorably to the right, will have a hard time getting elected. We have a scandal-prone, right-wing Prime Minister who, if he falls, would most likely be replaced by an even harder-line figure.
We see Mr Arafat's bottom lip trembling more by the week, and his aides denying rumours of terminal illness while his ministers and security chiefs quietly battle to succeed him. The Palestinian economy is in far worse shape than before the Oslo accords, unemployment is at 50 per cent in some areas, corruption is rife and untreated in the Palestinian Authority, and the attraction of the Islamists' call for holy war, rather than deadlocked peace, with Israel, can only be growing.
If Israelis incline to a bizarre kind of fatalism about the opportunities that are being missed, it seems unlikely that the Palestinians will prove so blithely apathetic. Indeed, in a worrying sign of what the new year may hold in store, Mr Arafat's own Fatah faction of the PLO, which is pledged to co-existence and to thwarting extremist violence against Israel, recently held an anti-Israel demonstration in Gaza. The highlight: a theatrical "kidnapping of an Israeli soldier". David Horovitz is managing editor of the Jerusalem Report