Dr. Abdul Aziz Rantisi stood in a chilly rain before the assembled crowd of nearly 400 Palestinians who, like him, were banished by Israel to southern Lebanon seven weeks ago. Now, said Rantisi, the group's spokesman, the Israelis were inviting each of them to appeal in person for the right to return. Would they comply? he asked the exiles huddled on a hillside near their meager tent camp. Was there an alternative to their demand for unconditional repatriation? The answer came back crisp and loud: "No. No. No."

That word reverberated through the deportation controversy last week. No, the Israeli High Court of Justice ruled, it would not reverse the government's decision to deport the Muslim fundamentalists who are accused of inciting violence in Israel and the occupied territories. No, the Palestine Liberation Organization said, it would no longer delay pressing its demand for sanctions against Israel at the United Nations. No, said Israeli Prime Minister Yitzhak Rabin, he would not give in and take back the exiles despite that threat.

The stage was set for just the kind of showdown Washington had hoped to avoid: a fight in the U.N. Security Council that would strand the U.S. between the interests of its good friend Israel and the diplomatically important Arabs. If sanctions come to a vote, the Clinton Administration will have to choose between exposing Israel for the first time ever to U.N. discipline and offending the Arabs by wielding a veto that the U.S. has not used for 2 1/2 years -- and pray that the results do not disrupt the Middle East peace talks. Playing the ace would be awkward at a time when Washington needs the U.N. imprimatur for its own course of discipline against Iraq.

The Clinton team would love to put off the sanctions debate so Israel can devise a face-saving way out. But outspoken U.N. Secretary-General Boutros Boutros-Ghali got the Palestinians smelling blood. The Security Council, he advised, should use "whatever measures are required" to enforce the month- old resolution calling for the return of the deportees. The P.L.O., which has observer status at the U.N., is pushing hard among Arab and nonaligned members to bar Israel from international conferences on human rights. It also proposes barring nations from trading with Israeli companies that do business in the occupied territories.

Although these penalties are relatively mild, Israeli officials are enraged at the very prospect of facing U.N. sanctions. "To put us in the same category as Iraq, Serbia and Libya -- it's unacceptable," says Rabin's spokesman, Gad Ben-Ari. "We've not swallowed another country or massacred thousands of people or harbored terrorists who blew up a packed airplane." To . block approval, Jerusalem has embarked on an intensive lobbying effort. Rabin took the unusual step of calling all ambassadors accredited to Israel to a late-night meeting at his office in Tel Aviv. There, they were served cold sodas and an hour and a half of the Prime Minister's disputations.

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