RAMALLAH, West Bank - Tony Blair couldn't ask for a better starting point as the new Mideast peace envoy. The Palestinian uprising has fizzled, and Israel says it's ready to work with a moderate Palestinian leadership after seven years of stalemate.

But the former British prime minister only has a limited mandate when he arrives in the region Monday, and despite his star appeal he could quickly become one in a long succession of well-meaning, yet ultimately ineffective mediators.

One note of caution has come from James Wolfensohn, Blair's predecessor as envoy of the diplomatic Quartet, made up of the U.S., the UN, the EU and Russia.

In 2005, Wolfensohn, a former World Bank president, was asked to oversee the rebuilding of Gaza after Israel's pullout from the area. Wolfensohn accomplished less than he had hoped and told the Israeli daily Haaretz last week that his main problem had been a lack of authority.

"There was never a desire on the part of the Americans to give up control of the negotiations, and I would doubt that in the eyes of (senior U.S. State Department official) Elliot Abrams and the State Department team I was ever anything but a nuisance," Wolfensohn said.

Blair, who has two days of meetings scheduled with Israeli and Palestinian leaders, also has been given a relatively limited assignment: to prepare the ground for a Palestinian state by encouraging reform, economic development and institution-building. There is no mention of trying to help broker a final peace deal.

Dan Kurtzer, a former U.S. ambassador to Israel, said the Bush administration would hamstring the new envoy.

"Blair is entering the post with the exact same constraints that Wolfensohn did, which is a United States that says, 'You will not engage in any issues related to final status. You are only going to deal with Palestinian institution building,"' Kurtzer told The Associated Press. "If he doesn't expand his mandate, I would not be optimistic."

Blair also will have to confine his work to the West Bank, since the international community continues to shun the Islamic militant Hamas movement, which has seized control of Gaza.

However, chances of transforming the West Bank are perhaps better than any time since the outbreak of Israeli-Palestinian fighting in 2000.

The violence, which left nearly 4,400 Palestinians and more than 1,100 Israelis dead, blocked any progress in peacemaking, but the uprising has run out of steam. Hamas, responsible for scores of deadly attacks, is largely contained behind Gaza's border fences and on the defensive in the West Bank. Scores of gunmen from moderate Palestinian President Mahmoud Abbas' Fatah movement, meanwhile, have surrendered their weapons in exchange for an Israeli amnesty.

The new West Bank government will likely be receptive to Blair's reform proposals. The caretaker Cabinet, installed after the fall of Gaza to Hamas, is headed by Prime Minister Salam Fayyad, an economist who helped clean up public finances during the era of Abbas' predecessor, the late Yasser Arafat.

Will he 'throw in the towel'?

On a personal level, Blair can contribute political experience, negotiating skills, knowledge of the conflict -- and enthusiasm. "I'm nothing if not an optimist," he told a Quartet meeting last week.

But Palestinian reforms and economic development are closely linked to progress toward a final peace deal, and there's no sign of that.

The Palestinians are eager to resume negotiations, but Israel says it's too soon. Israel is willing to talk about general outlines of an agreement, but argues that negotiations can only begin once Abbas has disarmed militants and restored order in areas under his control.

"(Blair) may be able to get something done in terms of institution building and confidence building," Israeli analyst Yossi Alpher said. "I don't think he has any chance for anything you could call a spectacular success by any means. My guess is he'll throw in the towel in frustration in about a year."

Blair, who meets separately with Abbas and Israeli Prime Minister Ehud Olmert on Tuesday, starts his mission at a time of opportunity, Alpher said, but Blair's close ties with President Bush and his support for the Iraq war may hurt his credibility in the Arab world.

Palestinian economist Samir Hleileh said he doesn't expect any breakthrough under Bush, and says for any chance of success Blair must stick to his mission well beyond the 2008 U.S. presidential election.

But Wolfensohn was not totally pessimistic.

Asked by Haaretz about Blair's chances, Wolfensohn said: "Better than mine were. He is closer to George Bush. He was prime minister. I do not believe there's much time. I think it is difficult. But we're fortunate to have somebody with experience."