Israel and the Palestinians:

Ariel Sharon will not return to active political life, but predictions about his medical prognosis should be ignored. Recovery of function from brain damage and recovery from stroke is an uncertain process.

Ehud Olmert will lead the Kadima party to victory and will form the next government (barring his illness or criminal proceedings).

Olmert will form a coalition government or unity government with Labor and
possibly Likud.

Olmert's government will dismantle at least some illegal outposts.

Olmert's government will make a "peace move" or diplomatic proposal.

The peace move will include some good will measures. These may include further release of prisoners, relaxation of checkpoints and withdrawals from Palestinian cities to create a better atmosphere.

The Israeli peace proposal will be turned down by the Palestinians.

In accordance with the plan published in Ma'ariv before Sharon's illness, Olmert's government will propose to withdraw from areas in the West Bank to a border that they will attempt to have recognized as the border of Israel by the United States.

Israel will not implement much or any of the proposal in 2006.

The United States will provide only a vague and ambiguous formulation concerning this border, which might read "In the view of the United States, Israel may legitimately claim this land in any future settlement."

The United States will not provide formal recognition of any border that is not negotiated with the Palestinians.

Mahmoud Abbas will remain head of the PA - barring ill health or assassination

Palestinians will hold elections at the end of January.

Palestinian elections will not be orderly.

Hamas will get a large representation in the elections, but not a majority.

Low key violence will continue from territories, but contrary to Israeli GSS expectations, Hamas will not escalate its attacks.

Lebanon and Syria

Assassinations of Lebanese opposed to Syria or Hizbullah will continue

Bashar Assad will remain in power

The UN investigation will conclude that there is not enough evidence to indict anyone, or they will ask for more time. It is very unlikely that they will be able to reach a definitive conclusion because of systematic destruction of evidence, suborning of witnesses and withholding of testimony.

Even if the UN investigation finds conclusive evidence against Syria, the Security council will do nothing.

There will be no US military intervention in Syria. In general, President Bush is too weak politically to muster support for dramatic moves.

President Emile Lahoud will remain in power.

The Lebanese army will not make a decisive move against Hizbulla.

Iran

Iran will enrich uranium and resume work on its Arak "research" reactor which is capable of producing fissionable plutonium.

Iran will not announce that it has a nuclear weapon.

Though there may be a UN resolution against Iran, it will not include any effective but no effective international sanctions.

There will be no Israeli military move against Iran

There will be no US military move against Iran.

The Iranian government will continue to make threatening statements against Israel and the United States, while insisting, on no evidence, that Israel and the USA are planning to invade Iran.

Iraq

USA will withdraw at least some troops from Iraq before the congressional elections.

The new Iraqi government will be generally "compliant" to US foreign policy.

In Shi'a areas there will be a repressive regime regarding personal issues such as dress codes and alcohol.

Iraq willl not "fall apart" into separate ethnic zones as is constantly predicted in different Web sites.

Violence will continue in Iraq from Sunni resistance and Al-Qaeda.

Oil

The price of oil will remain above $55, because OPEC members perceive that the market can bear this level without undue inflation or economic slowdown. Continuing increases in demand will slowly force prices up.

Al-Qaeda

Iraq - Zarqawi will still be there. If he is caught, Al-Qaeda will continue to function in Iraq.

Palestine/Israel - Al-Qaeda will continue to claim that it carried out actions against Israel. It may establish itself in Gaza and stir up trouble in Israel, PA, Egypt and/or all three. A convenient field of action is offered by Palestinian chaos and by the anomie in Southern Lebanon. Even if they don't carry out any actions, they can take credit for actions of the Hizbullah.

Things to watch

Will Amir Peretz be replaced as head of the Israel Labor party if the party does not achieve victory in the polls?

Will Ehud Olmert have the political savvy and leadership to actually carry out a program of disengagement in the West Bank?

Will Hamas be willing to participate in negotiations with Israel?

Will Israel be willing to negotiate with Hamas?

Will Israel implement the safe passage between Gaza and the West Bank?

(Final corrections and updates January 12, 2006)

Ami Isseroff