THE PEACE IN FLAMES

By LISA BEYER RAMALLAH

"They have poured out their blood like water round about Jerusalem." --Psalm 79:3

On the first day, it seemed an exaggeration to say that the intifadeh had returned, that the Palestinians had resumed their six-year, rocks-and-bottle uprising against Israeli occupation. Still, in Jerusalem, stones had flown and sticks had flailed as Palestinian protesters battled Israeli cops. But that was all. By the second day, however, the violence had spread, shots had been fired, four people were dead and the term intifadeh was no longer an overstatement. On Day 3, a new description would be required for the confrontation raging between Israelis and Palestinians. There was no other word for it but war.

War had once been an impossibility, since only the Israeli side was armed. But with the onset of Palestinian self-rule two years ago, Yasser Arafat's Palestinian Authority, with Israeli acquiescence, has amassed security forces numbering at least 30,000. Last week they turned their weapons on the Israelis, prompting, for the first time, a head-on clash between the two armies. By week's end, when hostilities had calmed to a simmer, 59 Palestinians and 14 Israelis had been killed and nearly a thousand others injured throughout the West Bank and Gaza Strip. Not since the 1967 Arab-Israeli war had the territories seen such carnage.

Putatively, it was all about a hole in the ground, dug by the Israelis in Arab East Jerusalem to complete an ancient tunnel showing off the buried foundations of Judaism's sacred Western Wall. Palestinians considered the digging a provocative incursion into their terrain, but in truth, it was only the match thrown into the tinderbox of accumulated Palestinian fury. For months, Israeli and Palestinian intelligence officials had warned of an impending explosion in the territories. In August, Ali Jirbawi, a political scientist at Bir-Zeit University in the West Bank, said, "Scratch the surface, and you find a state of anger." Palestinians were in despair over the paralysis in the peace process brought on by the election in May of Israel's hard-line Prime Minister, Benjamin Netanyahu. Still, the ferocity of the convulsion shocked even its forecasters. Said a captain in Israel's border police: "This is our very worst scenario come true."

After allowing the conflagration to burn for a time, Arafat began to work alongside the Israelis to damp it down. Though the disturbances continued into Saturday in a handful of places, Palestinian police by then were, for the most part, keeping the mobs from engaging the Israelis. Meanwhile, American officials frenetically tried to find diplomatic solutions to restart the peace process, including negotiations for a Netanyahu-Arafat summit.

The wounds of the miniwar, however, will not easily heal. "The credibility of the whole peace project has suffered. The idea of coexistence is much less believable now," says Ghassan al-Khatib, director of the Jerusalem Media and Communications Center. "From now on, people on both sides will find it easier to behave violently, as they did this week." The leaders on both sides must take a heavy share of the blame. Arafat is a faltering autarch who must clothe himself in a popular revolt to regain credibility with a people impatient with his imprecations of peace and condoning of corruption. The inexperienced Netanyahu, meanwhile, is clumsily showing a stunned Israeli populace that he is serious about pursuing his pre-election stance of confrontation, a policy once followed but finally abandoned by the generation of Labor leaders that preceded him.

Beyond the Israeli-Palestinian peace, what was at stake was the larger achievement of Israel's gradual acceptance in the region, a pattern already threatened by Netanyahu's policies. In Cairo the 22-nation Arab League accused Israel of plotting the destruction of Islamic holy places and hailed Palestinians for confronting "Israel's repression." King Hussein, Israel's closest ally in the region, denounced the "violation of the sanctity of the holy city."

As the Jerusalem Post noted, the war in the territories was a high price to pay for a tunnel. Most of the 537-yd.-long underpass had been accessible to tourists for several years, but with only one opening--in the Jewish Quarter of Jerusalem's Old City--serving as both entrance and exit. Municipal officials say they knocked out the new exit to facilitate more traffic through the narrow passage, especially during the days-long Jewish holiday of Sukkoth this week. Enhancing tourism, however, was an odd motive to cite, given the predictably virulent Arab reaction. The opening of an exit in the Arab Quarter in 1988 provoked such unrest that the Israelis sealed it up. This time too authorities anticipated a backlash, digging out the new exit in the dead of night, under heavy police guard.

What lay behind the government's decision to proceed anyway was its determination to assert Israeli control over all of Jerusalem. Israel conquered East Jerusalem in the 1967 war and quickly passed a law annexing it (though no country recognizes Israeli sovereignty there). The Palestinians, however, want East Jerusalem to be the capital of a future Palestinian state. Despite the previous Israeli government's willingness to negotiate the issue, as required by the 1993 Oslo accords, Netanyahu refuses to honor the provision, insisting that all Jerusalem remain exclusively in Israeli hands.

Thus the wild reaction by Palestinians to the tunnel opening. Because the passage runs alongside the Haram al-Sharif, the plateau on which Islam's holy Dome of the Rock and al-Aqsa mosque are built, Muslim authorities charged that the excavation might endanger those sites. More importantly, the tunnel opening had become the inflammatory symbol of who was truly boss in East Jerusalem.

Initially, the Palestinian protests were spontaneous. Scores of youths on the Haram al-Sharif, which the Jews call the Temple Mount, threw rocks onto Jewish worshippers at the Western Wall below. Elsewhere in East Jerusalem protesters scuffled with Israeli police. The next day Arafat and the Palestinian Authority embraced the unrest. After a Cabinet meeting, his Finance Minister, Mohammed Nashashibi, told reporters the ministers endorsed "escalation by all means."

And escalation they got. The hottest clash that day was in Ramallah in the West Bank. Hundreds of youngsters descended on the Israeli checkpoint at the city's southern entrance, provoking a battle of stones and bottles vs. tear gas and rubber bullets. According to al-Khatib, who witnessed the melee, when Israelis resorted to live ammunition, a handful of Palestinian security officials, egged on by the crowd, shot back.

The next day, bloody thursday, as the Israeli media dubbed it, saw all-out battles between Israeli troops on one side and, on the other, Palestinian civilians backed by Arafat's soldiers. Palestinians clashed with Israelis everywhere they could find them: on the roads, in checkpoints on the outskirts of town, in Jewish settlements in the West Bank and Gaza Strip, at Jewish religious sites still under Israeli control within the Palestinian cities. "People were just running toward death, attacking Israeli soldiers who they knew would shoot them," says Ziad Abu-Amr, a political scientist and member of the Palestinian Legislative Council. At one point, the Ramallah Hospital, overwhelmed by casualties, stopped keeping track of the numbers.

Moving to a war footing, Israeli commanders sent thousands of reinforcements into the territories, tripling their manpower there. They also beefed up the available firepower. For the first time in recent memory the Israelis flew Cobra helicopter gunships above Palestinian towns, firing 20-mm shells at Palestinian shooters. In some cases troops traveled about in armored personnel carriers. For the first time since the 1967 war, the Israelis moved tanks into the territories--mainly for the purpose of intimidation. But after three days of fighting, commanders issued orders that the next time Palestinian forces shot at Israeli troops, the response would be tank fire.

The Palestinian leadership continued to encourage popular unrest, calling for strikes and demonstrations. A number of prominent figures joined street marches. Arafat's chief of Jerusalem affairs, Faisal Husseini, was seen on TV being jostled by Israeli soldiers; later he fainted and had to be hospitalized. During another tussle, Minister of Islamic Affairs Hassan Tahboub was clubbed in the head by an Israeli policeman and was hospitalized in stable condition. Arafat, when he appeared publicly, said nothing to calm the situation and instead lashed out at Israel's "big crime against our religion."

In fact, the tunnel opening was a godsend for Arafat. "The Israelis threw him a golden opportunity, and he pounced on it," says Khalil Shikaki, director of the Center of Palestine Research and Studies, based in Nablus. For one thing, embracing the uprising offered Arafat the prospect of improving his standing with his own people, which had fallen unprecedentedly low. Says Shikaki, whose center regularly monitors public opinion: "Optimism about the future had flown out the window." Palestinians blamed mostly the Israelis for their hopelessness, but also Arafat and his P.A. They felt their leadership had been duped into a dead-end peace deal. And they bristled at the corruption and abuse rife within the power structure created by Arafat.

Key Arafat cronies have established virtual monopolies in a number of commodities (for instance, cement), channeling part of the revenue to the P.A. and pocketing the rest. Petty forms of corruption are common--and just as galling. Palestinian police are notorious for confiscating goods--such as stolen items or expired food products--and then reselling them to another merchant, or even back to the original offender.

The 88-member Palestinian Legislative Council that was elected in January was supposed to check the power of Arafat's executive. But when a group of councilors was asked recently what percentage of their resolutions were implemented by the P.A., they broke out laughing. The answer was zero. Arafat has trampled on the supposedly independent judiciary as well. In mid-August the High Court in Ramallah ordered the release of 10 university students detained without being charged in a roundup of alleged Islamists. But Arafat squashed the order, explaining to a delegation from the Legislative Council that he had not been consulted by the court and was not its puppet. Soon after, the head of the court was forced to retire.

The P.A.'s reputation has been sullied most of all by its security force, which has suppressed internal opposition through mass arrests, brutal interrogation techniques and kangaroo courts. Human-rights activists who have complained of these abnormalities have found themselves in jail.

Until last week, Palestinian officials were openly worried that a new intifadeh would be directed at them as much as, or instead of, the Israelis. The strongest warning came in July, when Arafat's gendarmes claimed a seventh torture casualty, provoking an anti-P.A. riot in the victim's hometown of Nablus. When the trouble spread to nearby Tulkarem, Palestinian security suppressed the unrest by shooting and killing a protester. The revolt sent shock waves through the P.A. and raised concerns that other insurrections would follow.

As it happened, the Israelis were actually the first to get it from the Palestinian masses, who are incensed by Netanyahu's blatant foot-dragging in the peace process. His predecessor, Labor's Shimon Peres, was also regarded as excessively tough. But, notes Ali Jirbawi, "at least with Peres there was a sense that we were moving. Slowly, yes, but the dream of an independent Palestine was still alive. What is dangerous about Netanyahu is that he shattered this dream."

The Labor government had been edging toward acceptance of a Palestinian state, albeit one with restricted powers and circumscribed borders. Netanyahu, however, is dead set against that; if he has his way, autonomy is all the Palestinians will ever achieve. Neither his reluctant summit with Arafat last month nor the subsequent follow-up meetings produced any progress toward the expansion of Palestinian authority in the West Bank promised in the Oslo accords. Says a senior Western diplomat in Israel: "The Israelis talk the talk, but nothing changes on the ground." Adds Khaled al-Qidrah, Arafat's attorney-general: "The behavior of the Israeli side is killing this agreement."

The stalemate has been exacerbated by profound economic distress in the territories. For seven months, Israel, in response to terror attacks, has curtailed the number of Arab day laborers allowed to enter Israel, contributing to a 50% Palestinian unemployment rate. Netanyahu recently agreed to increase the permits for day laborers by 18,000 to 50,000. Still, economic growth is impeded by Israeli restrictions. Lengthy security checks mean few Palestinian goods reach the Israeli market, even as Israeli products flow freely through the crossing points. Palestinian trade with Jordan and Egypt is restricted, also for security reasons, as is commerce between the West Bank and the Gaza Strip. Thus not only is the Palestinian economy closed, it is cut in two.

So when Jerusalem authorities cut through the last part of the Hasmonean tunnel, as it is called, they tapped into a wellspring of rage, all of it, for the moment, directed at Israel. "Our internal differences have been put aside for now," says Abu-Amr. "We see a situation of firm unity among the Palestinians." Arafat's troops, who were widely viewed two weeks ago as the enemies of the public, are its heroes today. Abu-Amr concludes, "This is definitely consolidating and broadening the power base of Mr. Arafat."

The disturbances may also strengthen Arafat in his dealings with the Israelis. Says al-Khatib: "It proves to the Israelis that he has certain cards to play if they continue to stall the peace process." Certainly Arafat was in no great hurry to squelch the uprising. On Wednesday Israeli security officials expressed frustration that he was not responding to their appeals to restore calm. On Thursday afternoon Arafat issued a call to his forces for restraint. But it was half-hearted, and the violence, though lessened, continued into Saturday. Netanyahu, once so resolutely standoffish, phoned Arafat asking for a meeting. But the Palestinian leader gave no firm answer. Says Jirbawi: "He wants to give it back to Netanyahu."

If Arafat is so far the story's victor, Netanyahu is its goat. The outbreak of violence caught Netanyahu on a European tour, and his comments from abroad seemed eerily out of sync with developments back home. While Muslims worldwide howled in protest, he announced he was "proud" that his government had opened the Jerusalem tunnel. Hours after the initial Israeli-Palestinian gunfight, he asserted that "there is nothing to worry about." As for the complaint that the peace process was moribund, he maintained, that was absurd since he had after all already met with Arafat once. Asked whether he thought Netanyahu was insensitive, a senior U.S. diplomat replied, "Oh, my gosh, that's an understatement."

The wisdom of opening the tunnel was called into question by no less than Netanyahu's Defense Minister, Yitzhak Mordechai, a retired general who allowed that he couldn't say "with finality that...all considerations were taken into account." The army chief of staff, Lieut. General Amnon Lipkin-Shahak, said he had not been consulted. And Ami Ayalon, head of the Shin Bet, Israel's internal intelligence agency, said his recommendation that the opening be paired with a concession to the Palestinians was ignored.

The Israeli press, generally unsympathetic to Netanyahu on a good day, savaged him. Columnist Yoel Marcus quoted an unnamed friend of Netanyahu's as saying, "His conscience is clear because he never used it."

After returning home, Netanyahu showed no sign of softening. Although U.S. Secretary of State Warren Christopher privately suggested that Israel close the tunnel exit, the issue was not even discussed in a five-hour government meeting. At a Friday press conference, Netanyahu blamed the disturbances wholly on the P.A., insisting the unrest was organized from the very start and decrying this "attempt to cynically manipulate a nonissue."

In Washington the Clinton Administration could do little more than talk softly and wring its hands. It has little leverage with Netanyahu. The relationship between an Israeli Prime Minister and a U.S. President is always crucial--and that between Clinton and Netanyahu is merely cordial. The warm affection between Bill Clinton and the late Prime Minister Yitzhak Rabin will never be replicated with Netanyahu. "What you've got here is two individuals who are wary of individuals like themselves," says one White House official. "Ultimately it's a matter of shared motives--that's the mark of deep common chemistry, and that's what's missing." Until Netanyahu chooses another way, no amount of U.S. mediation can move the peace process along. Perhaps, as a senior State Department aide says, "the prospect of international outrage and more, the chance that Israel's economy can be adversely impacted by his head-in-the-sand policies, will cause Netanyahu to see the light." But any learning curve will be steep.

Among Israeli security officials on the new front line, the mood was more sad than indignant. The good relations established over the past three years between soldiers and officers on both sides had been one of the glowing achievements of the peace process. Now that was all in peril. "They were shooting at us like we never made peace, like they never sat with us, like we never laughed together," lamented a young officer in the Gaza Strip. One of the wounded soldiers Netanyahu visited in Jerusalem's Hadassah Hospital told the Prime Minister he recognized the man who shot him from a joint patrol they had conducted in the past. Said an Israeli commander serving in the West Bank: "What we built together is collapsing. It's going to be very hard to rebuild the trust."

On the other side, spirits were actually buoyant, despite the disproportion of casualties among the Palestinians. "It's not like people are gloomy and sad," observes Abu-Amr. "They are proud and happy that the Palestinians are finally standing up. It's an act of empowerment, even if it comes at a price."

Does that mean that having again tasted the thrill of confrontation, the Palestinians will seek more of it? Not necessarily. To unravel the current tension, Israel will have to start complying with its commitments to expand Palestinian self-rule, starting perhaps in Hebron, the last major Palestinian city still under exclusive Israeli control. "All the Palestinians want is for Israel to respect its commitments," says Abu-Amr. Shikaki agrees: "Despite everything, the Palestinian street continues to support the peace process, and that support is solid. The masses don't think there's any alternative to it, so the minute the P.A. and the Israelis are able to sit down and make some progress, things will become calm again." Netanyahu has taken his first terrible bloodying as Prime Minister. It is up to him, more than anyone else, to decide which way the Palestinians will now go.

--With reporting by Jamil Hamad/Gaza Strip, Aharon Klein/Ramallah, Scott MacLeod/Paris and Dean Fischer, J.F.O. McAllister and Lewis M. Simons/Washington

With reporting by JAMIL HAMAD/GAZA STRIP, AHARON KLEIN/RAMALLAH, SCOTT MACLEOD/PARIS AND DEAN FISCHER, J.F.O. MCALLISTER AND LEWIS M. SIMONS/WASHINGTON