Jerusalem — On a breezy, floral-scented evening last week, Arab leaders from Israeli-occupied territory met at a July 4 reception in Jerusalem. Just 15 months ago, an event such as this might have brought together the Arab mayors of Hebron, Halhul, Bethlehem, Nablus, ramallah, Gaza, and Bira.
But at last week's gathering on the Pasha's Terrace of east Jerusalem's American Colony Hotel, the only one attending was Elias Freij of Bethlehem.
The rest who did not or could not attend were either casualties of political violence or Israel's rigorous policy of checking political dissent in the occupied territories. Those missing were:
* Muhammad Milhem of Halhul and Fahd Kawasmeh of Hebron. They were expelled from Israel last May after charges they contributed to an antagonistic atmosphere in Hebron, where a group of Jewish settlers were murdered. Appeals for their return have been denied by Israeli judges.
* Mayors Bassam Shaka of Nablus and Karim Khalaf of Ramallah were crippled in terrorist bombings last summer. Since then, their activities have decreased.
* Mayor Rashad Shawa of Gaza resigned after the bomb attacks.
* Mayor Ibrahim Tawil of bira was greatly shaken by the acts.
The result has been something of a political vacuum in the Arab leadership of the occupied territories.
These mayors were the hope of the West Bank and Gaza -- a vital force emerging between the radical, Beirut-based Palestine Liberation Organization, and the Israeli government of Menachem Begin.
They, and a dozen other prominent Arab men and women, were becoming a moderate voice for Palestinians. Western diplomats believed they were the leadership nucleus of an as-yet-unborn "autonomous" West Bank- Gaza anticipated in the Camp David agreement of 1978.
Instead the West Bank seems leaderless and disspirited. Whatever remained of the independent voices of the West Bank and Gaza has diminished in the past year due to:
* Tough Israeli military policies toward the territories.
* An accelerated Israeli settlement timetable on the West Bank.
* A general drift of world attention toward other middle East problems -- the Iran-Iraq war, new Lebanese hostilities, the Israeli-Syrian and Israeli-Iraqi crises.
"Now," says a western diplomat, "there is really almost nothing happening in the West Bank and Gaza Strip -- nothing organized and constructive at least."
This observation is repeated by American activists affiliated with churches and working in the area. Says one: "Since May of 1980, the lid has gone on."
In Bethlehem the day after the reception, this writer talked with Mayor Freij about the mood of Palestinians in his town. Mr. Freij is a pragmatic, moderate Greek Catholic who has governed the town for 10 years. Last year he was restricted to Bethlehem by Israeli authorities. Now he is free to travel. his major complaint is that divisions and disorder in the Arab world continue to strengthen the hand of the Israeli government and weaken the Palestinian cause.
"We don't have a plan," he said. "We have no prognosis. We don't know our minimum or maximum possible goals. We still say we want a sectarian state in Palestine. Yes. But is this really a possible thing? We must study this to find out. Why is there no think tank in the Arab world to plan our strategy for confronting Israel?"
Mr. Freij says the demoralization of Palestinian activists reached its height recently after the Israeli raid on Iraq's nuclear reactor: "In two minutes the Israeli Air Force destroyed a whole reactor in Baghdad. I tell you, every action needs an action. But for every action we only give out a cry. And believe me, I am hearing this freely and openly. people are so angry about that [the Israeli raid on Iraq] that they mocked it, they mocked the other arabs."
A diplomat who concentrates on the West Bank and Gaza concurs with Mr. Freij over the need for Arabs to plan a common strategy, especially now that the Israeli elections have taken place. The general defeatism, he says, must be replaced by practical goals and by a new set of leaders skilled at working within the system.
What political movement there is below the surface among the 1.5 million Palestinians in the occupied territories is being channeled through the mosque, where Arabs can at least meet freely. This is producing a modest Islamic revival among conservative Sunni Muslims. Leftist groups, which have appealed to Palestinians not so much for ideology (most Palestinians are capitalists in the Arab tradition) but as a vehicle for expressing opposition to the Israeli government, have been long power.
Arabs in Israeli tended to vote for the Labor Party. It will take several more such elections to determine whether a trend has been established.