I am grateful to my right hon. and learned Friend and constituency neighbour the Minister of State for replying to this brief debate on Israel-United Kingdom relations. I congratulate my right hon. and learned Friend on his most constructive interview on Israel Radio last week, of which I have read the text.

I should like to say a little, first, about why I chose this subject. The United Kingdom has extremely close relations with Israel. The Balfour declaration of November 1917 first gave British support to a Jewish homeland. As the mandatory power between 1920 and 1948, we were directly responsible for the area then called Palestine. The countries that we now call Iraq and Jordan were effectively created by Winston Churchill after the Cairo conference of 1921. The Hashemite dynasties were placed on their respective thrones by him, largely to assuage the anger of the Emirs Feisal and Abdullah because Feisal was turfed off the throne of Syria by the French. The flag of the new nation—or, rather, of the reborn nation of Israel—was raised on 14 May 1948 as the British high commissioner left Palestine for the last time.

There are many people alive today—some of them still in this House—who were physically present in those difficult and dangerous days. Britain and Israel will always be good friends, because our friendship was born out of the sufferings of the Jewish people and nurtured by the political and social institutions that we bequeathed to the state of Israel.

Then there is the Jewish community in Britain. I am not a Jew and I have no Jewish family, constituency or business interests, but because I am closely connected by friendship with our Jewish community, I know the intense loyalty and affection that they feel for the Jewish state of Israel, while of course being among the most distinguished, valued, patriotic and hard-working of all the subjects of Her Majesty the Queen.

I came to this cause as an undergraduate at Cambridge—a Christian by conviction and practice and studying history. As a student, I read about the Inquisition, the Crusades, the pogroms in western Europe and Tsarist Russia and the ultimate abomination of the Nazi beasts. I knew in my heart then, 30 years ago, and I know it to this day, that there had to be an answer to the stake, the rack, the pogrom, the gas chamber and the crematorium. There could be no Christian theology that could ignore or excuse the stench of burning Jewish babies. There had to be a political response which showed that evil did not finally triumph at Auschwitz. There must be one place in the world where a Jew could feel entirely and unhesitatingly at home. That place is the Jewish state of Israel. Its rise, like a phoenix from the ashes of the crematoria, will always be an inspiring cause for me, and I make no apology for it.

I am not blind to Israel's faults, but I am not blind to Britain's either. I love my own country and, although I am a Gentile, I love Israel as well. I count it an honour to receive filthy, anti-Semitic hate mail, as I often do, and as I certainly will after this speech. I know that the mild burden which I carry in receiving such muck is as nothing to that placed on the Jewish people by Christians for 2,000 years and carried week after week by Jewish Members of this House in their own postbags.

I make these points because that is the background against which I want to deal with a number of specific issues. I welcome unreservedly the generous tributes paid by the Prime Minister, the Foreign Secretary and my right hon. and learned Friend the Minister of State to the courage of the Israeli people when they were facing ordeal by Scud missiles during the Gulf war. As the allies asked, Israel did not retaliate, but that put great strain on its political and social structure. Hon. Members should ask how we and our constituents would have felt if we had endured missile attacks night after night and made no military response.

It was right that Ministers should show support for the Jewish state, and it was right that sales of British oil, suspended since the oil crisis of 1979, should be resumed. It is now appropriate to go further. United Kingdom trade with Israel has hovered around £1 billion for too long. We need a quantum leap in that important market. Hundreds of thousands of Soviet and Ethiopian Jews are pouring into Israel, and many more are likely to come over the next few years, and I want to see British firms being encouraged by the Government to make their contribution to housing those people. A strong trade mission to Israel, headed by a senior Minister, would be appropriate as soon as possible following the worthwhile visits by Ministers to Kuwait and other Gulf states.

The Department of Trade and Industry should take a much more vigorous line over the Arab trade boycott, which is not recognised by Britain and which lacks international sanction. The boycott is wrong in principle and should have no place in a civilised world trading system. European legislataion should be drafted along the lines of United States laws to outlaw the boycott. The Department of Trade and Industry should tell British firms to ignore it rather than just to use their commercial judgment.

I cannot understand why we still retain an arms embargo against Israel. It is nine years since its military operation in Lebanon. Yes, there are still some Israel military personnel in Lebanon and the South Lebanese Army of General Lahad is trained and armed by Israel. However, Lebanon has effectively been annexed by Syria, which has thousands of troops in that sad country. There are foreign troops all over the middle east in other people's countries—some by invitation, some not. Israel has no difficulty in obtaining weapons from the Americans, and it makes many of its own anyway.

In the completely changed circumstances after the Gulf war and with the collapse of the Warsaw pact, I should have thought that our British arms companies would welcome access to the Israeli market. At present, we are leaving the way clear to the Americans to sell weapons to the Israelis and the Arabs. That does not help British business or diplomacy. The embargo policy has lost all meaning and should be changed at once.

I have a few random thoughts on how we should proceed with the peace process, which is crucial to relations between Israel and the United Kingdom. Humility is called for from a Gentile living on the peaceful Rutland-Northamptonshire border. Members of my family are not threatened with stabbing every time they go shopping and I do not live 20 miles from a country that is still theoretically at war with mine. I know that everything that I shall advocate today is hotly disputed by- many Jewish people in Israel and virtually all the Arabs. There is no one solution and no single proposal that commands significant majority support in Israel, and we elected western politicians should remember that when we draft our paper scenarios for peace in the middle east. I shall give my beliefs, for what they are worth.

First, no borders between Israel and its neighbours are sacrosanct except those with Egypt which have been settled by a formal peace treaty. The other borders are ceasefire lines and remain open to negotiation. Secondly, no useful or honourable purpose can be achieved by Israel remaining in permanent military occupation of the whole of the west bank and Gaza. The local Arabs do not want Israel there and there cannot be a lasting peace on that basis. Further Jewish settlements in disputed areas are unwise and put unnecessary pressure upon those seeking peace, but such settlements say nothing about the final status of those territories. Nor is it acceptable that such areas should be required to be Judenrein. The dreaded concept of "transfer" is unacceptable and monstrous, as is the concept that all Jews should be prevented from living in an area that has been sacred to them for thousands of years, but they may not always live there under an Israeli flag.

If there are to be real and worthwhile negotiations on the basis of United Nations Security Council resolutions 242 and 338, they will involve land for peace, but not necessarily all land. If both sides approach peace talks on the basis of non-negotiable maximalist demands, they will never get off the ground. The great powers cannot impose a settlement. They cannot resolve the internal political differences in the Israel democracy or among the Palestinians.

In 1921, Churchill could put Arab emirs on the thrones of countries that he had created by the exercise of colonial authority. However, if the United States is not even prepared to depose Saddam Hussein by force after totally defeating his army, it is ludicrous to think that Secretary Baker or Foreign Minister Bessmertnykh can act like the Emperor Napoleon and Tsar Alexander at Tilsit in 1807 or like Sykes and Georges-Picot in 1916 and carve up the middle east between them.

Any settlement must be accepted by all parties to the dispute, and they must be able to sell it to their people. It is pointless to go to a conference table saying that no part of the Golan Heights will ever be handed back to Syria and no new sovereignty will be allowed over the west bank and Gaza.

Equally, it is useless to say that nothing else will do except that the Golan Heights should be returned unconditionally to Syria or that there can only be an independent Palestinian state comprising the whole of the west bank and Gaza, with east Jerusalem as its capital. Those are not negotiations: they are war cries. I have told distinguished Palestinians in the consulate general in Jerusalem—the people met by my hon. and learned Friend the Minister and by Secretary Baker—that if all that they are prepared to demand is the establishment of an independent Palestinian state on pre-determined borders, there is no point in having a peace conference, because they will already have spelt out their non-negotiable demands and the Israelis would not attend such a conference anyway.

Also, I have told Jewish friends that, if all that they envisage is the status quo or an ultimate outcome of limited Arab autonomy, that would not be the implementation of Security Council resolutions 242 and 338. No Arab leader could possibly accept that except as a temporary and transitional stage, as was proposed in the Camp David agreements over a decade ago.

There must be a peace conference. Both sides need to compromise on the initial arrangements. The Palestinians should be encouraged to hold early internal elections, as proposed by Mr. Shamir in May 1989. The newly elected leaders should be recognised as the Palestinian part of a joint delegation with Jordan. Of course, most of them will be members of the Palestine Liberation Organisation, and some will be Hamas. They do not need to say that too loudly and, as Shimon Peres has said, it is best not to inquire too closely into their background once they are elected. There is no need to argue about their home address, whether it be Ramallah or Nablus road, Jerusalem, as long as it is not Tunis or Baghdad. Israel will not sit down with people who boast loudly that they take their orders from Yasser Arafat, who sided with Saddam Hussein in the Gulf war. If the elected spokesmen of the Palestinians are prepared to control their public rhetoric, a joint delegation could be created which would be representative and realistic.

There seems to have already been some movement on the conference. Israel would prefer no conference and bilateral negotiations with its Arab neighbours. Syria and the PLO want a United Nations conference with all five permanent members of the Security Council and the Arab states so that they can avoid direct negotiations with Israel. Neither proposal is realistic. The best answer is what Secretary Baker and Foreign Minister David Levy have been inching towards, which is a regional conference under joint American-Soviet auspices with a plenary session, separate working parties and perhaps a report-back session six months later.

The question whether the Secretary-General of the United Nations and the European Community should be represented by observers is a relatively peripheral matter on which concessions could be made by Israel. Of course, Israel is unhappy with the United Nations because of the notorious "Zionism is racism" resolution. That should be scrapped at once. Also, it is doubtful about the European Community, which it regards as pro-Arab since the Venice declaration. Those are not matters of great substance. They are not like Kissinger's "three lousy hills".

The main thing is for discussions to get under way. It is perfectly possible for Israel and Syria to make peace, given proper agreements on security and electronic listening devices on a totally demilitarised and United Nations-supervised Golan. I cannot see that this is a sensible time for new Israeli settlements, called Brukhim and Kanaf, to be established on the Golan by Mr. Ariel Sharon. It is possible for progress to be made in separate discussions about the west bank and Gaza, provided they include a Jordanian-Palestinian deputation and neither side persists with maximalist demands.

I would not pretend to any great optimism, and the behaviour of the PLO in the Gulf war made matters harder. An announced immediate end to the intifada and a release of more detainees could represent joint confidence-building measures on both sides. Public renunciation of all acts of violence by the PLO and a freeze of further settlement activity on the west bank would be other useful steps.

Many people may have been led to believe that peace between Israel and the Arabs was just around the corner once the Gulf war ended, but specialists on the issue know that, like the 400-year-old Irish question, it is one of the most complex and divisive problems in the world. Perhaps it is a problem without a solution—only with an outcome, as happened on the battlefield in 1948, 1967 and 1973—but I hope and pray that that is not so. "Blessed are the peacemakers," and never more than when trying to make peace in the holy land itself.