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Irked by the slow rate of progress in Israeli-Palestinian peace talks, major Arab players are threatening to withdraw their offer to normalize ties with Israel once a Palestinian state is established. Underlying the Arab reassessment is a deeper problem: Arab belief in the viability of "the two-state solution" is diminishing. And the worry in Jerusalem is that this growing lack of confidence could undermine the fragile negotiating process so carefully put in place at the regional peace conference in Annapolis, Md., last November.