ISRAEL At 40: the Dream Confronts Palestinian Fury

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Mexico. ''I want to be Jewish. I don't have to apologize. It is my very essence.'' He is an affectionate and demonstrative father, and small children tend to sprawl on his knees and interrupt him with coy, lolling, attention-seeking questions. He pauses during his interview every time to answer the child first. Palestinians? ''There is no Palestine.'' Jews called it Palestine before 1948. The Arabs who call themselves Palestinians are transients. West Bank? ''There is no West Bank in real geography. It is really the west bank of the Dead Sea.'' Dayan does not ''want to offer Arabs second-class citizenship.'' The Arabs must leave, or be persuaded to leave through a requirement of national service or high taxes. ''They should have 48 hours in which to sign a loyalty oath to the Zionist state. Otherwise they will be expelled in trucks.'' Dayan hates the American television networks, which he regards as virtually ! Palestinian terrorist weapons, a judgment heard often. ''Their message to the Israelis is 'Don't be brutal. Be moral.' Fine. We can be moral and surrender the territories, and after that we will have to surrender the Galilee!'' Where does it end, with Israel solving its public relations problem by leaping into the Mediterranean Sea? With a cheerful fierceness, Dayan describes the reality that he sees around him: ''Everyone around here hates everyone, and everyone hates the Jews. I want to avoid killing Arabs, and so I want to expel them. You know, at a Super Bowl in America, I saw a black man singing the national anthem. In Israel, you would not find one Arab, not one, to sing the national anthem of Israel!'' But the Jews have granted the Arabs no voice. It is grotesque to invite the mute to sing. In Kafr Qaddum, an Arab village in the hills of the West Bank not far from Nablus, the people have strewn boulders across the road to stop intrusions. They are frightened. The sun is bright, vivid. A red-green-white-and-black Palestinian flag on a makeshift pole flies from the mosque in the distance. Now one sees the young Palestinian, wrapped in a dense, irrational thunder, walking up the road. His legs move like scissors, stiffly; his body is jolted with anger. His eyes, looking inward and outward simultaneously, are sightless with rage. They are red and shattered, as if a bomb had gone off inside them and fractured the window glass, behind which is a red fire. He does not want to talk, but does, finally, when he has settled down. He says a Jewish settler came in a car and used an Uzi and killed his friend. The new grave is down at a crossroads by the mosque. An Israeli helicopter passes overhead. The friend of the dead man promises, ''We will never forget.'' Has Israel lost its way? Israelis may find the question offensive. It implies that the answer is yes. And further, that the asker knows the true ''way'' and Israel does not. The question suggests that Israel, in making its way through history, may have obliviously or foolishly blundered into swamps or deserts off the true path. Would anyone ask if France had lost its way? If Japan had lost its way? And yet: Israel, although an ancient people, is a new country, unlike France or Japan. Moreover, Israel, like the U.S., is essentially an idea, a vision, a mission, a created entity. Like the U.S., Israel has claimed a certain exceptionalism, a special nature that derives in part from its essentially moral purposes. ''We don't want to be just a state,'' says Amos Oz, an Israeli