Things are pretty depressing when you find yourself turning to the Israeli-Palestinian conflict to cheer yourself up.  But despite the killings in Gaza this week, some important good things are happening there.

The first good thing is that the Israeli security fence is turning out to be a boon to stability, rather than an irritant.  There was plenty of evidence that the fence would help reduce terror. The fence separating Israel from Gaza has been highly effective at preventing terrorist incursions, and with large stretches of the West Bank fence already erected in the north, there's been a drop in suicide bombings. Streets are busier. Nightclubs are back to their normal frenzy.

We didn't know if the fence would oppress Palestinians by creating Bantustans — wholly enclosed Arab communities surrounded by barbed wire. But David Makovsky has just completed a monograph for the Washington Institute for Near East Policy in which he analyzes the fence as it is actually being constructed. He's found that the fence is generally following the route Bill Clinton had proposed as a possible border between Israel and a future Palestinian state.

Makovsky counted the populations of all the villages and settlements on each side of the fence. He found that "fewer than 13,000 Palestinians — that is, less than 1 percent of the West Bank total — will actually be stranded on the Israeli side of the barrier." About 54,000 Israeli settlers, a quarter of the settler population, will be on the Palestinian side.

In other words, the fence leaves 99 percent of the West Bank Palestinians on a contiguous 87.5 percent chunk of West Bank land.  That is a reasonably fair provisional border, which the two sides can modify if they ever get around to cooperating.

The Israelis initially planned a much more intrusive fence. But skillful diplomacy by Colin Powell, Condoleezza Rice, Stephen Hadley, Elliot Abrams and other U.S. officials led to modifications. For example, the Israelis initially wanted to build a series of secondary fences that would have enclosed Palestinians. One of those deeper fences would have encircled 65,000 Arabs just east of the Tel Aviv airport. The U.S. prevailed on Israel to abandon those plans.

The second bit of good news is that Ariel Sharon's proposal to withdraw from Gaza and a few West Bank settlements has punctured the myth of Greater Israel and shifted the Israeli debate.   Now discussion of the settlements centers not on the murky issues of security or history, but on the clearer issue of democracy.

An overwhelming Israeli majority opposes the far-flung settlements, so they are now seen as antidemocratic. When the Israeli actor Shlomo Vishinski was told this week that his son had been killed in Gaza, he didn't blame Sharon or Hamas, but Likud activists.  "I live in a democratic regime, and I want the majority to decide," he cried. It is only a matter of time before democratic institutions catch up with the will of the majority.

Vice Premier Ehud Olmert epitomizes the new realism. When I had coffee with him this week, I expressed frustration with the outer settlements. Olmert defended the settlers warmly, saying they were believers sacrificing for a cause. "They need a hug," he said, waxing Oprah-esque.

It just so happens, he argued, that they are on the wrong side of demography. Jews cannot claim the West Bank without becoming a minority in their own land. Therefore Olmert has called for a withering away of many West Bank settlements.

This is a Likudnik who opposed Oslo and believes that Jews have a historic right to the territories. But he's not oblivious to reality, and argues convincingly that any future prime minister — Bibi Netanyahu, himself or anyone else — will inevitably pursue disengagement.

Nobody actually likes the fence, he adds. Pulling back from those settlements will not bring peace. After all, Ehud Barak pledged to pull back from dozens of them, and Yasir Arafat still said no.

But as long as there is no Palestinian partner to negotiate with, Israel will have to withdraw, fight and coordinate: withdraw from most territories, fight Hamas and coordinate with Egyptian and Palestinian pragmatists to make sure that fundamentalists don't fill the vacuum left by retreating Israeli forces.

Don't look for glorious handshakes on the White House lawn. But we could see a series of grudging unilateral actions that will lead to less death.

These days, that's cause for giddy celebration.