Mideast diplomacy has taken off after the death of Yasser Arafat (search).

Foreign policy chiefs from around the globe have been lining up to visit Israeli and Palestinian officials, proclaiming a new era of opportunity has arrived.

Diplomats caution that a resumption of Israeli-Palestinian peace talks will take time. But they are eagerly looking forward to next month's Palestinian presidential elections as an important test and are offering cash and other assistance to make sure the vote goes smoothly.

"I think the present situation with the coming election is a great opportunity ... to move toward a resumption of the peace talks, which will lead to two states living peacefully side by side," German Foreign Minister Joschka Fischer said during a stop in Israel last week.

Fischer was the latest in a series of high-profile visitors since Arafat's Nov. 11 death. First was European Union foreign policy chief Javier Solana, who attended Arafat's funeral in the West Bank town of Ramallah before huddling with Palestinian officials.

He was followed by Secretary of State Colin Powell and foreign ministers from Russia, Britain, Egypt, Spain and Germany. British Prime Minister Tony Blair (search) is expected shortly before Christmas.

The diplomacy — and sense of optimism — is a dramatic contrast to the atmosphere when Arafat was alive.

Israel and the United States described Arafat as an obstacle to peace, accusing him of backing militant attacks against Israel. U.S. officials did not call on him, and Israel made it clear that foreign officials who visited the Palestinian leader would not be welcome in Israeli government offices.

U.S. Embassy spokesman Paul Patin said Powell's visit and the White House's stated intention to make the Israel-Palestinian conflict a top priority were a recognition of a changed political landscape. "We didn't only say that Arafat was an obstacle, he was an obstacle," said Patin.

European diplomats acknowledge that officials couldn't — or wouldn't — visit while Arafat was alive.

"The disappearance of President Arafat gives an opportunity for a new dynamic," Spanish Foreign Minister Miguel Moratinos said earlier this month.

Egypt, which recalled its ambassador from Israel shortly after the September 2000 outbreak of the Palestinian uprising, has also become more upbeat.

After years of disparaging Ariel Sharon (search), Egyptian President Hosni Mubarak recently praised the Israeli leader as the region's best chance for peace. In a dramatic goodwill gesture, Egypt last week released an accused Israeli spy, and speculation is high that the Egyptian ambassador to Israel will soon return.

Egypt also has played an important role in promoting Sharon's plan to withdraw from the Gaza Strip next year, offering to help ensure security after the pullout.

For now, however, the world's attention is focused on the Jan. 9 Palestinian presidential vote. Both Israel and the international community have given tacit support to interim Palestinian leader Mahmoud Abbas.

Israel has pledged to pull troops out of Palestinian population centers for 72 hours during the vote, while the international community has offered millions of dollars in aid and international observers.

Announcing $3.5 million in election assistance, U.S. Mideast envoy William Burns spoke of the bloodshed and loss of hope in recent years.

"Palestinians deserve credit for their careful management of a difficult leadership transition, and their commitment to the electoral process. Israel has been commendably clear in its commitment to facilitate elections," Burns told a gathering of Mideast donors in Oslo, Norway.

The U.S. election aid was in addition to $20 million in direct assistance to the cash-strapped Palestinian Authority.

The European Union has allocated about $18.6 million for preparing the Palestinian elections, while Japan has committed $1.1 million and will send electoral observers.

Diplomats say the ultimate goal is to resume talks on the "road map," an internationally backed peace plan that seeks to create an independent Palestinian state alongside Israel next year. They also warn that the road forward has potential hazards.

They say Israel must keep its pledge to allow free movement of candidates and voters around the Palestinian territories, and the U.S. administration must live up to its public commitment to take a more hands-on approach than it did in President Bush's first term in office.

Palestinian officials said they were concerned about recent comments by Bush, who described Palestinian democracy as "the heart of the matter." They said Bush is ignoring the Palestinians' first priority — ending Israeli occupation.

"I don't think that democracy can exist under occupation," said Palestinian Cabinet minister Saeb Erekat.

Diplomats say that whoever wins the election will have to take control of armed Palestinian militants. The new leader must also have the confidence of international donors, whose help will be crucial in rebuilding the shattered Palestinian economy.

"There is a need for security, economic and political reform with clear benefits to both sides," said Britain's consul general in Jerusalem, John Jenkins.