Diplomacy: New Year's Surprise

The bespectacled figure with the scraggly beard and the checkered kaffiyeh headdress was familiar. The manner in which he smilingly addressed Jews around the world -- with their traditional New Year's greeting, shanah tovah -- was not. Palestine Liberation Organization Chairman Yasser Arafat, who earlier had spoken to a meeting of 165 socialist deputies to the European Parliament in Strasbourg last week, was clearly determined to make a good impression.

Arafat hinted at two possible courses of action for his organization: proclaim a Palestinian state in the Israeli-held Arab territories, or advocate a U.N.-backed mandate in them after Israeli withdrawal. But a final decision, he said, must await the forthcoming meeting of the 451-member Palestine National Council, for which no date has yet been announced.