It was only a small sign of progress, but in a city where not a single traffic light works and where Israeli soldiers stand guard, it was nevertheless a welcome change. Last weekend, a Palestinian construction crew repaved a road. It was just a road, but it was also a manifestation of the fragile optimism here that the United States is about to launch a new effort to resolve the Israeli-Palestinian conflict.But even the most hopeful Palestinians, such as the worker who has rebuilt this same road four times in the past year, are unsure what a new push for peace can accomplish. ‘‘Something seems to be changing,’’ said Maher Natsheh, 46, as he shouted instructions to a backhoe driver near the Ayosh Junction, which became notorious as a site of clashes between Israeli soldiers and stone-throwing youths at the start of the Palestinian uprising 30 months ago. ‘‘But we don’t really know what is coming,’’ Natsheh said.On the crowded streets of Ramallah, the de facto Palestinian capital, there is neither gloom nor a strong sense that conditions are about to improve. Of all the major Palestinian cities, this is where optimism should reign. Israeli soldiers rarely venture into the city center, and curfews are no longer imposed. Residents are relatively free to work, shop and attend school. Over the weekend, streets and sidewalks were crowded with cars and people. Cafes were open, and so were shops selling Italian leather shoes, European perfumes and American jeans.But everyone remains wary, and the tensions are easy to detect. ‘‘People are out, but no one is buying,’’ said Bassam Zaaror, 41, owner of a jewelry shop near Manara Square. He has laid off 15 workers in the past two years. ‘‘If they come in, they buy only the most basic piece, and the cheapest.’’Mohammed Abu Shadi, 53, is a moneychanger in Ramallah, and his family left Israel as refugees shortly after it became a state in 1948. He insists there can be no peace until he is allowed to reclaim his family’s land near Jerusalem. ‘‘I am ready to give up the house I have now to return to my old village and my old land, even if it means living under the rule of Israel,’’ Shadi said.There seemed to be little concern or talk about the political wrangling going on nearby at Palestinian leader Yasser Arafat’s presidential compound. Mahmoud Abbas, chosen to become the Palestinian Authority’s first prime minister, is struggling to form a new Cabinet and officially take office. Legislators have already curtailed some of Arafat’s powers over finance, and Abbas is attempting to take over Arafat’s control of internal security. American and European diplomats have urged Arafat’s advisers to compromise in favor of Abbas, and compromise will prompt the Bush administration to release a peace plan — a program requiring both Palestinians and Israelis to make significant concessions. Israeli Prime Minister Ariel Sharon has indicated he will agree to a partial troop withdrawal and has said he would meet with Abbas as soon as a new Palestinian government is formed. (LAT-WP)