With 'final-status' talks going nowhere, will he go it alone and declare a Palestinian state?

By LISA BEYER /JERUSALEM

he nameplate already says "Palestine," but so far it remains wishful thinking for the delegation that sits behind it at the U.N. The idea that such an entity might one day exist got a boost last week when the General Assembly voted to create a new status for "Palestine" that upgrades its rank to something between a mere observer and a full-fledged state. With that small triumph, Palestinian leader Yasser Arafat kicked off his latest plan to create a new nation, whether Israel agrees or not.

It is central to the Oslo peace accords that the so-called final status of the Palestinian territories be decided jointly by the Israelis and the Palestinians. But with negotiations over expanding even limited authority deadlocked, and given the intransigence of Israeli Prime Minister Benjamin Netanyahu over the issue, Arafat is now threatening to ditch the process and simply declare a state in the West Bank and Gaza Strip next May 4. That is the expiry date of the "interim" Oslo accords, which provided for some self-rule while the two sides haggled over a permanent deal.

Arafat's threat has not excited much popular enthusiasm: a recent poll showed 58% of Palestinians support the idea, but there is enormous skepticism about whether he can pull it off. "It is a joke," says Bassem Eid, a leading human rights campaigner, who notes that back in 1988 the Palestine Liberation Organization proclaimed from exile a state in the West Bank and Gaza Strip. "People want to know how many times can you declare a state." The corruption and abuse of power rampant in Arafat's Palestinian Authority (P.A.) also dampen enthusiasm. "We don't seem to be able to govern ourselves even in this small space," says Sari Nusseibeh, president of Al-Quds University in the West Bank. He says more and more Palestinians are returning to the idea of a bi-national state, with equal rights for both Israelis and Palestinians.

Disgusted with the P.A., the elected Palestinian Legislative Council (P.L.C.) last month threatened a vote of no-confidence in Arafat's cabinet. Week after week, Arafat has managed to stall it by promising to remake his cabinet, which has resigned en masse. But even the most reform-minded council members do not expect big changes; nor do they think they can muster the votes to reject Arafat's choices. "We will never vote no-confidence," says member Husam Khader, a rebel from Arafat's Fatah movement. "Too many people in the council identify their own interests with the authority's."

The P.A.'s performance, and the council's inability to check it, have produced a malaise among the population. "We are living in a period of extreme political apathy," says political scientist Ali Jirbawi. Arafat's aides have counseled him not to expect much public support should he wish to take the conflict with Israel to the street, as some P.A. officials have threatened lately.

With little other leverage, Arafat is banking on his May 4 threat to nudge the Israelis into fulfilling their Oslo commitments. Specifically, Israel is supposed to expand the area under self-rule in the West Bank, 3% of which is today under Arafat's full control and 27% of which is ruled jointly. Even if the Israelis comply, Arafat would still be faced in final-status talks with an Israeli government adamantly opposed to Palestinian statehood. Should Arafat declare a state anyway, Arab countries would certainly recognize it and most of Europe is likely to go along. The Israelis have hinted that if Arafat follows through on his threat, they would re-invade the self-rule zones and perhaps annex part of the territories. Israel would have to think twice before acting on these strong words, however, given the certain international condemnation.

Since Oslo, the U.S. position has been that if both sides agree to a Palestinian state, the U.S. has no objection. For now, Washington is counseling Arafat to be patient and stick with the incremental approach. But Palestinian officials hope to soften Washington up in coming months. President Clinton's comment last January, that he "sympathized with the aspirations of the Palestinians to live as a free people," was taken by some as just short of an endorsement of statehood. Then on May 6 Hillary Clinton told a group of Arab and Israeli teenagers she thought it was "in the long-term interests of the Middle East for Palestine to be a state."

Even with significant international recognition, Palestine's problems would have only just begun. In the best scenario, Arafat would have control of only a fraction of the territory the Palestinians claim, which encompasses all the Gaza Strip and the West Bank, including east Jerusalem. "We would say to the world, this place and that place are still under occupation and we ask you to help us liberate them," says Abu Ala, speaker of the P.L.C. But the world has never been of much help to the Palestinians in this respect. And it might be less helpful if a case could be made that "the Palestinian issue" had been resolved by the creation of Palestine.

--With Reporting by Dean Fischer /Washington And Jamil Hamad /Ramallah