Mostly they ran into stone walls. Netanyahu refused to make any conciliatory gesture to Yasir Arafat, and with that, the Palestinian leader refused to meet him. Netanyahu seemed hemmed in by a shaky coalition that is ““such a bunch of extremists that they make him look like a moderate,’’ in the view of one U.S. insider. And he misplayed his hand, as well. To many in Washington, the new Israeli leader’s handling of his first major crisis seemed so inept that it raised an alarming question: is Bibi up to the job?

A foreign-policy emergency was the last thing Clinton needed in the final run-up to the U.S. election, and the implications go well beyond Nov. 5. The violence in the West Bank and Gaza, which took the lives of at least 53 Palestinians and 14 Israelis before tapering off at the weekend, isn’t likely to cost Clinton votes. But if he hopes to add a final Mideast peace deal to his presidential legacy, he needs to be able to rely on Netanyahu. And a return to violence could only hurt Western strategic interests throughout the Arab world, especially in the gulf. Though international pressure may bring Arafat and Netanyahu to the table this week, the bloodshed was a disturbing reminder of how easily the prize could slip away–and how little Washington can do to prevent that. ““It’s absurd that we have so little influence over a country we pour so many billions into,’’ says a senior Pentagon official.

The immediate cause of the violence–opening an archeological tunnel beneath Jerusalem’s old city–was the equivalent of a thumb in the eye to Palestinians, who are already seething over Netanyahu’s moves to increase the Israeli presence in the holy city’s Arab quarter. The two previous Israeli administrations had refused to provide a second entrance to an ancient viaduct beneath the Temple Mount, despite the fact that the change would permit many more tourists to visit the archeological site. It was seen as simply too sensitive a spot: the tunnel adjoins both Islam’s third holiest site, the Al Aqsa Mosque, and the ruins of Judaism’s Second Temple, which Netanyahu’s more radical followers want to reconstruct in an effort to bring on the Messiah. In 1990, 17 Palestinians died there while protesting a Jewish group’s effort to lay a cornerstone for the new temple. Netanyahu approved a secret plan to open the tunnel under army guard in the dead of night. ““He acts like a teenager,’’ said Yaron Ezrahi, Israel’s leading political theorist.

If the plan was dubious, its execution was even more so, in the view of Clinton’s team. Netanyahu failed to notify Washington, the Palestinians–or even his own chief of staff. And the morning after the tunnel was opened, he flew off to Europe to pursue an itinerary aimed at persuading European leaders of his commitment to peace. He didn’t cut short his trip until military commanders had taken the unprecedented step of sending armor and helicopter gunships into the West Bank and Gaza.

Defiant pose: Netanyahu flatly rejected entreaties from Christopher to reseal the tunnel, at least temporarily, in order to shut down the killing. To bend, he argued, would reward Palestinian violence and acknowledge Arab rights in Jerusalem. The tunnel opening, he said, was ““an expression of our sovereignty, our history.’’ The Israeli prime minister also argued that reversing course would cause right-wingers to defect from his government, bringing it down. In public, he struck a defiant pose. Arafat’s support for protests over the tunnel opening, he said, amounted to ““a deliberate act of incitement.''

To be sure, Arafat was testing Netanyahu by finally playing a hole card: the willingness of young Palestinians to face Israeli guns, and to die. The Palestinian leader’s message to the Israeli electorate was that the alternative to fully implementing the peace deal is not stasis, but a return to the crippling intifada. Palestinians have been infuriated by Netanyahu’s apparent contempt. Having promised ““peace with security,’’ he has not yet revealed any kind of peace program. ““Firmness is not a policy; it’s a means to achieve an end,’’ says Peter Rodman, who served as a policymaker in the Reagan administration. ““It must be accompanied by a political strategy.''

For many Israeli and foreign observers, the issue was Netanyahu’s performance as much as his ideology. ““He’s an idiot, he pulled the rope too tight,’’ says Shoshi Eitan, a Tel Aviv housewife who voted for Netanyahu. ““I didn’t want another intifada.’’ Netanyahu has surrounded himself with untested aides drawn from his coterie of loy- al friends. The Foreign and Defense ministries feel sidelined, and Netanyahu lacks the military bearing that is so reassuring to Israelis in a crisis. ““People feel there is neither leadership nor competence in decision making,’’ said Ezrahi. ““And now we have bodies in front of us.''

The question is, how free is Netanyahu to moderate the stance that got him into trouble? The administration’s hope is that the Israeli business community, not entreaties from Warren Christopher, will force him to his senses. ““Watch the [Israeli] stock market,’’ said one White House aide. (Clinton, too, is hemmed in; in spite of the administration’s palpable anger, the political reality remains that no American president will risk confronting the American Jewish community in the run-up to an election.) Netanyahu’s peace plan, such as it is, hinges on revitalizing the Israeli economy through privatizations. That, he claims, will improve the lives of Israelis and Palestinians alike. Business will hardly rush to build that vision if all the world sees is a picture of civil war.

The opening of a new entrance to an archeological tunnel sparked riots in the West Bank, the Gaza Strip and outside the Al Aqsa Mosque, Islam’s third holiest shrine.