We used to say we wanted peace for our children. Now we don't want to wait, we want peace now

King Abdullah II

The mood was informal and relaxed. Inside the house deep, comfortable sofas were interspersed with small tables carrying family photos.

On the walls glass cabinets displayed an impressive array of firearms and other ornamental weapons from His Majesty's collection.

King Abdullah II was friendly and approachable. He was realistic about his country's difficulties, its sensitive geographical location squeezed between Saddam Hussein's Iraq and the daily violence next door in Israel.

But he was also eager to show his impatience to develop his country's potential, whatever was happening in the region.

'Peace now'

"We used to say we wanted peace for our children," he said. "Now we don't want to wait, we want peace now.

King Abdullah II with Queen Rania and their baby girl Princess Salma

"The potential for this area to be booming is not far-fetched. But as long as there is the crisis in Israel, we shall never flourish in the way we aspire to."

He sees himself as being at the forefront of a new generation of young Arab leaders, unburdened by "the same baggage as our fathers," as he put it, "that allows us to move beyond what trapped the older generation."

By that he appears to mean opening up the country to the outside world through privatisation, aggressive programmes to encourage foreign investment, and - his particular baby - projects to wire up Jordan to become computer literate and turn his desert kingdom into the electronic hub of the Arab world.

But when the new Intifada started 11 months ago, politics intervened. The King's vision of imminent prosperity no longer looked so credible.

This last year tourism from Western visitors has plummeted by 40% (though Arab tourists still come in droves).

A group of five-star luxury hotels under construction in Amman now look something of a gamble.

And the king admitted the daily clashes next door had caused considerable strains.

Dialogue hopes

He described the conflict between Israel and the Palestinians as a Pandora's box.

Let's see if international observers can do something, because there's nothing else to go for

King Abdullah II

"There is always the possibility that the violence could spill over from being an Israeli-Palestinian dispute and become a wider Israeli-Arab conflict."

A crisis that had to be solved before it got out of hand. And he said he believed there was little hope of the conflict subsiding on its own, the animosity was now too deep-rooted.

Instead the outside world had to find a way to get the two sides to disengage and start talking again.

In King Abdullah's view, the best idea on the table at the moment is the call for international monitors, even if there is still no consensus on who they would be or how they would function.

Tellingly, he added with an underlying hint of near-despair: "Let's see if international observers can do something, because there's nothing else to go for."

Understanding the US

As for the American position, the young king of Jordan insisted he had no problems with it. He was not frustrated, he said, at the current American disengagement from the Middle East crisis.

"You have to understand their point of view," he argued.

The Bush administration felt both the Israelis and Palestinians took the previous Clinton administration for granted and played each other off against the United States.

"The US is desperate to get involved," he said.

"But until both sides can show maturity, the US feels it will be taken advantage of again. Both need to do more. The American presidential card is an important card. When he steps in, he must be 99.9% certain of success."

Meanwhile King Abdullah recognizes, like his father the late King Hussein before him, his importance in this turbulent region as a moderating influence.

He denied that he was under pressure from Jordan's large Palestinian population to maintain Jordan's peace treaty with Israel.

He said even the Palestinian leader Yasser Arafat saw it as an asset to have Arab leaders in Jordan and Egypt who could intervene with the Israelis in a crisis.

Self-preservation

So he would not contemplate breaking off ties with Israel.

"Arafat doesn't want it," he replied firmly. "Who else would talk to the Israelis?"

But this is also about self-preservation - a small country, stretched to the limit by poverty and high unemployment, and few resources beyond the determination and talents of its own people.

So if the violence did escalate, King Abdullah was adamant: Jordan would not stand for another Palestinian exodus to swell its already crowded refugee camps.

"That's a red line for Jordan: we have made it clear to Washington, Israel and the Europeans."

It would weaken the Palestinian call for an independent state, he said. But it seems the main reason may be that Jordan simply could not cope.

"Physically we are limited by water," he said. "We could not sustain anymore citizens."