YES

(VAR x0 x1 x2 a b)
(RULES
  double_divide(inverse(x0),double_divide(x1,double_divide(x0,x2))) -> double_divide(x2,inverse(x1))
  double_divide(double_divide(x0,x1),x2) -> double_divide(inverse(x1),double_divide(inverse(x2),x0))
  double_divide(x0,double_divide(x1,double_divide(inverse(x0),x2))) -> double_divide(x2,inverse(x1))
  inverse(double_divide(x1,x0)) -> double_divide(inverse(x0),inverse(x1))
  double_divide(inverse(x0),x0) -> identity()
  double_divide(identity(),x0) -> inverse(x0)
  double_divide(x1,double_divide(x0,x1)) -> x0
  inverse(inverse(x1)) -> x1
  inverse(identity()) -> identity()
  double_divide(a,inverse(a)) -> identity()
  double_divide(a,identity()) -> inverse(a)
  multiply(a,b) -> double_divide(inverse(a),inverse(b))
)

(COMMENT
Termination is shown by KBO with weight

  w0 = 1
  w(double_divide) = 0
  w(identity) = 1
  w(multiply) = 4
  w(inverse) = 0

and precedence:

  inverse > double_divide > multiply > identity
)