Yasser Arafat has survived yet another Israeli siege which was intended to humiliate him, render him irrelevant to the political process and force dozens of men on Israel's most wanted list to surrender. He emerged from the rubble of his headquarters looking fitter and healthier than he had done in weeks. Aides and bodyguards lifted the Palestinian leader up on their shoulders to flash V signs and blow kisses at the crowd. His first words were all about defiance.

In a hastily arranged press briefing, the man who is winning the Middle East's version of "Survivor" was in fine form. A journalist asked a bothersome question and Arafat almost leapt out of his chair. "How dare you ask this question," he shook and thundered, "Don't you know it is General Arafat you are speaking to?"

The wanted figures taking refuge with Arafat, men whose fate Israel said was going to be prison or exile, probably left the building by mingling with the dozens of journalists who stormed the gates minutes after the last Israeli jeep drove off. Some might have exchanged clothes with the well-wishers who showed up to demonstrate their support.

By accident rather than by design, Israeli Prime Minister Ariel Sharon was on board a flight to Moscow when Israeli tanks and soldiers withdrew from the area around Arafat's headquarters. He had presided over an early morning cabinet meeting where the decision was made to end the siege, then flew out leaving junior ministers to explain this Israeli capitulation.

Minister without portfolio Danny Naveh tried to tough it out. "These suspects should not fool themselves for even a minute. I have no doubt they will be in our hands in the end," he said, referring to the wanted men. "And those who fool themselves into thinking that Israel has given in on this are wrong."

But Israel did give in. It gave in without achieving any concessions. The Palestinians promised nothing in return for the lifting of the siege. By backing down so completely, the Sharon government demonstrated an interesting point. When Washington really wants to apply pressure, it can, and it works.

The Israel government had defied calls from friendly Arab states, the Europeans and even a UN Security Council resolution to lift the siege. The Bush administration dropped hints all week about the situation in Ramallah not being helpful.

After nine days of hints falling on deaf ears, Sharon's Chief of Staff Dov Weisglas was summoned to a brief meeting with National Security Advisor Condoleezza Rice on September 28. He could not get back to Jerusalem fast enough to deliver her message. Whatever Rice told her guest in private, it was straightforward enough for Sharon's staff to understand that serious damage to Israel's relationship with the United States was on the cards if it did not comply without delay.

In a radio interview the morning after the withdrawal, another government minister, Natan Sharansky, was more candid than Naveh. "We did not consider, when we decided two weeks ago [to lay siege to Arafat] how much the United States has already started counting down to the strike against Iraq," he said.

Washington's agenda is focused on building support for removing Iraqi President Saddam Hussein, and a disagreement with other Security Council members on events in Ramallah is a bothersome distraction. Resolving the situation to Arafat's advantage might also have gone a long way towards mending fences with America's allies in the Middle East.

Then Sharansky pointed out that the decision to besiege Arafat's headquarters had been taken hastily and without much thought about the consequences. One consequence is that few people remember the event that caused Israel to surround the Ramallah compound with tanks and snipers – the September 19 suicide bombing on a Tel Aviv bus. What will be remembered are the images of demolition equipment gnawing away at Arafat's office building.

Some Israelis are already looking forward to a day, after President George W. Bush has dealt with Saddam, when America will again turn its attention to the Palestinian-Israeli conflict. They note that it was the outcome of the 1991 Gulf War which paved the way to the Madrid peace conference, and later the Oslo peace accords. They hope some similar, dramatic initiative will follow decisive US action against Iraq.

There will, however, be one major difference. When the dust settled in 1991 Arafat, who backed Saddam, was very much out in the cold. This time around he will be firmly within the US camp. After this week's events in Ramallah, he owes a great debt to the United States.