Depression and despair are the dominant sentiments reported by European and United Nations representatives from Israel in recent days. The Israeli media are filled with warnings of imminent all-out war. Prospects of any political progress to arrest or reverse the cycle of violence with the Palestinians are bleak, according to political and diplomatic reports.
It is widely recognised that only US and European pressure on the parties can prevent a further escalation; but there is no sign that this is a priority for President George W. Bush, who has supported the Israeli prime minister, Mr Ariel Sharon's dismissive attitude towards the Palestinian leader, Mr Yasser Arafat.
The Europeans are justifiably furious about Israeli targeting of buildings and facilities supplied to the Palestinian Authority and financed by EU states. These include the airport in Gaza, the official Voice of Palestine radio station in Ramallah, statistics and forensic offices and municipal buildings, costing some €17.3 million. There is a move to seek compensation from Israel for this at the next meeting of EU foreign ministers.
This destructive policy appears to be driven by the Israeli prime minister, Mr Ariel Sharon, who seems determined to undermine Mr Arafat and the Palestinian Authority. Those in Israel who believe the alternative to him would be worse are very much on the defensive.
The policy of maximum Israeli retaliation for each act of individual terrorism is bringing the various groups leading the Palestinian intifada together. These include those close to Mr Arafat's Fatah organisation, increasingly involved in armed actions and terrorism against Israeli troops and civilians because they do not want to lose influence with the Palestinian population. Mr Arafat says it is impossible for him to move effectively against armed groups while he remains under Israeli house arrest in Ramallah.
Such an escalation is more and more dangerous for the Middle East region, but there is little likelihood that it will be scaled down in the short to medium term. Yesterday's actions involving Hezbollah guerrillas on the Lebanese-Syrian border reinforced the Israeli conviction that Iran has decided to arm its enemies. Such a belief could embolden Mr Sharon's right-wing cabinet colleagues to support an all-out war against Mr Arafat and the Palestinian Authority and reconquer the West Bank and Gaza in the name of greater Israel.
Only the fear that this would be quite unacceptable to the United States and Europe restrains them. There is a widespread feeling that President Bush supports Mr Sharon's approach and has lost confidence in Mr Arafat. He may no longer feel the need to cultivate Arab states following military success in Afghanistan and may also believe there is little his government can do while Palestinians and Israelis are so comprehensively polarised against one another. It should fall to the European states to correct that imbalance. But as yet they lack the political will and resources to do so. Hence the widespread feeling that this conflict is rapidly spiralling out of control.