The grand summit meeting in Cairo last week showed a modicum of Arab unity in the face of a new hard-line Israeli government. It also laid bare the deep divisions and jealousies within the Arab world. Egyptian President Hosni Mubarak enveloped Yasser A rafat in a long bear hug when he met the beleaguered Palestine Liberation Organization chairman at the Cairo airport. But when Sudan's Islamist President, Omar al-Bashir, tried to kiss Mubarak on both cheeks, he received the traditional Arab greeting stif fly. Mubarak then escorted al-Bashir to the terminal without speaking.

The Arab leaders were in Cairo to draw international attention to Israel's renunciation of the original terms of the Middle East peace process. No less important, they sought to heal divisions in the Arab world. Mubarak's warmth toward Arafat showed ho w much pro-Western regimes have invested in the P.L.O.'s crumbling 1993 accord with Israel. And Mubarak's chilly reception of al-Bashir provided a prime example of intra-Arab feuding. Mubarak accuses Sudan of harboring the men who tried to murder him last year. The two countries, like half a dozen other Arab states, also dispute their common border.

Mubarak was more adept at handling other leaders' quarrels. On the summit's sidelines, he brought Arafat and Syrian President Hafez Assad together for their first meeting in three years. In addition, Mubarak got Assad and Jordan's King Hussein to ta lk to each other.

Libya's Colonel Muammar Gaddafi provided comic relief and a whiff of scandal at the meeting. After flying from Tripoli in violation of a U.N. ban on flights to and from Libya, the colonel pulled up at the conference center in a white Cadillac stretch l imousine. His female bodyguards, in camouflage uniform, ran behind the car. Wearing a turban, satin waistcoat and white robe, Gaddafi took his place at a conference table specially designed to ensure that none of the 14 Arab heads of state or six crown pr inces and Premiers outranked the others.

If Israeli Prime Minister Benjamin Netanyahu refuses to relinquish occupied Arab land or allow the establishment of a Palestinian state, the peace process will be destroyed, Mubarak warned in his opening speech. This simple message, however, was perhap s the only issue on which the Arab leaders agreed.

At least three attempts to convene full- scale Arab meetings have failed since 1990, when the Arab world split with particular bitterness over Iraq's invasion of Kuwait. Israel further divided Arabs by dealing with their governments individually, concl uding separate peace agreements with the P.L.O. and Jordan. Netanyahu's election, though, has brought Arabs closer together.

In the 1960s and '70s, Arab League summits called for the dismantling of the Jewish state. By comparison, last week's meeting was subdued. A single olive branch was adopted as the summit's symbol. Even so, Arab leaders fear Netanyahu's promised expansi on of Israeli settlements in the occupied West Bank and his three nos--no Palestinian state, no return of the Syrian Golan Heights and no discussion of Jerusalem. If the peace process dies, say the Arabs, don't blame us.

The region's new alliances were on display at the summit. After supporting Iraq in the Gulf War, King Hussein flip-flopped and made peace with Israel. He now enjoys its friendship, along with that of the U.S. and Turkey. Syria, its Lebanese satellite a nd Iran form the rival grouping. Jordanian-Syrian ties have deteriorated since King Hussein's 1994 treaty with Israel, and the basing of U.S. war planes in Jordan angered Assad. Jordanian officials say armed infiltrators in recent weeks have entered their country from Syria.

The text debated by Arab leaders over the weekend was the result of some mean horse trading earlier between Jordan and Syria. According to Arab diplomats, Syria wanted the summit to call for a freeze in the normalization of Arab relations with Israel b ut dropped the demand in exchange for Jordan's acceptance of a phrase distinguishing "terrorism" from "legitimate resistance to occupation." Damascus also wanted to see Turkey condemned for building dams on the Euphrates River, upstrea m from Syria, but relented when Jordan agreed to leave out mention of Iran's alleged "support for terrorism."

For many Arabs, Netanyahu's victory vindicated Syria's long holdout in negotiations with Israel. "Hafez Assad is the most popular leader in the Arab world now," said Egyptian writer Fahmi Howeidy. "People needed to see a leader who said no. When Assad refused to meet [American Secretary of State] Warren Christopher in April, all of us were happy. Arabs feel such humiliation. Hafez Assad represents dignity in their mind."

Arafat's tenuous authority may be the first casualty of Netanyahu's election. "Arafat has been a courageous leader in outrightly recognizing Israel," said Bassam Abu Sharif, a former adviser to the P.L.O. chief. "But I have no doubt in m y mind that a slowdown in the peace process will destroy him."

Netanyahu is planning state visits to Jordan and Egypt but has so far refused to speak to the P.L.O. chairman. Nonetheless, Arafat has heeded Mubarak's advice to "play it cool and don't get yourself involved in emotional reactions."

Arab diplomats and academics predict a bleak future for the region if Netanyahu keeps his campaign promises. "What I dread is the stagnation and decomposition of the peace process," said Leila Shahid, Arafat's ambassador to Paris. "There will be operations and counteroperations between settlers and Palestinians." Said Ali Hillal Dessouki, dean of political science at Cairo University: "If the government of Israel betrays or reneges on the peace process, it invites a great deal of strife for Israel and the Palestinians."

In the 1950s and '60s, Egyptian President Gamal Abdel Nasser tried vainly to unite the Arabs and conquer Israel. He died at the end of a 1970 summit called to stop the fighting between the forces of Arafat and King Hussein. "As an Egyptian citize n, I'm depressed," said Hoda Abdel Nasser, the former President's daughter. "I grew up with the idea of Arab unity. We Arabs are always forced to do things we don't want to because the U.S. supports Israel totally and blindly."

The Clinton Administration has asked Arabs to give Netanyahu the benefit of the doubt--to wait and see. But unless the new Israeli Prime Minister veers radically from the course he has set for himself, his deaf ear to Arab demands is unlikely to achiev e peace where years of diplomacy have failed.

--With reporting by Jamil Hamad/Jerusalem, Scott MacLeod/Amman and Amany Radwan/Cairo