Depending on whom you talk to in the Middle East, Palestine either is on the verge of being born -- or the occupied West Bank and Gaza Strip territories are locked up tighter than ever under Israeli control.
The case for the first view: Diplomats and government officials throughout the region -- but especially those in the relatively moderate Arab countries of Jordan and Egypt -- have told this correspondent that a sequence of events may be bringing the United States, Egypt, Jordan, Israel, the residents of occupied territories, and the Palestine Liberation Organization (PLO) closer than ever to a point of dealing with one another.
Signposts along this route, these optimists say, are a probable new government in Israel by this summer which is likely to be more moderate than Prime Minister Menachem Begin's ruling coalition; a US President who does not have to prove his support of Israel and therefore may be able to make some bold new move in the direction of the Palestinians; a diplomatically stronger King Hussein of Jordan; and a fragmented PLO, which is increasingly under Syria's thumb and looking for a way out through a change of tactics.
A Western diplomat posted an Arab country puts it this way: "With a more flexible American approach, more flexibility in Israel -- given that Israel knows it is becoming more isolated internationally and is losing support in the US -- the time may be ripe. Maybe if the PLO, too, realizes that time is not on its side, we will see a willingness to talk."
Egypt's President Anwar Sadat last week urged the PLO to prepare to play its trump card by forming a government-in- exile. The next step then would be for the PLO to recognize Israel's nationhood, within its pre-1967 borders. Then the PLO, Western officials say, would have gone the extra mile and assumed the position of a potential negotiating partner.
The PLO, however, rejected Mr. Sadat's suggestion. "A trump card that is not played is valueless," observes one diplomat.
Moderate Arab officials say that recent statements by US Secretary of State Alexander Haig to the effect that some, but not all, PLO members are terrorist may point to a softening of the American view that thus far has written off the entire organization. A Jordanian officials says King Hussein's forthcoming visit to Washington may not be able to nudge President Reagan over to this view of the PLO, but combined with other developments, "it may be a nudge among many."
"We feel that the European initiative, along with our firm stand behind the PLO, what Sadat is saying, and what Haig is saying -- these all will help," the Jordanian says.
One scenerio talked of by Western sources (though not actually reflecting the policy goal of any nation) is that under the Labor Party in Israel the democratically elected mayors of West Bank towns could take a lead role in negotiating for the future Palestinian state, with PLO approval, in federation with Jordan.
Although King Hussein has made it clear he is not about to steal the PLO's negotiating role, he could support West Bankers and the PLO in their decision to federate with Jordan.
Another scenerio is that the PLO, realizing it is drifting further away from the West Bank through its relationship with Syria and its continued use of terror tactics, tells the elected mayors that they are the new PLO executive committee and the old PLO becomes an adviser in negotiating. This, is essence, would cause the formation of a new PLO on the West Bank -- where the real trading will take place anyway.
"After all," says one observer, "the PLO was never elected and has never governed. It may have taken on the job of leaidng, but it is not a legitimate government."
It should be noted, however, that these are but scenerios:* None of the most important players has yet begun to play them out in full.
Almost as many observers in the Middle East see the West Bank and Gaza as an unsolvable problem. The case for their view: Supporters of Palestine are far from united, as witness the Iran-Iraq war, Syrian-Jordanian difficulties, problems with Libya, and disputes in North Africa. Therefore, this side is unable to come up with a unified position on how to negotiate toward an eventual Palestinian state with the knowledge that Israel must be guaranteed its security.
These observers say President Reagan is firmly in the Israeli camp, and a new Labor government is Israel is likely to be merely a change of faces, not a change in expansionist policies. Seeing this, the PLO and Syria will all but give up diplomacy and revert to armed conflict.
"What can we expect now?" asks an Egyptian official frustrated by the stalled Camp David process. "Everybody says there could be a 'Jordanian option,' but look at Jerusalem, look at the West Bank settlements, the autonomy talks. What about a Palestinian option?"
Several pessimists even predict that Egypt and Israel will experience serious difficulties before 1982, when Israel is to relinquish the final one-third of Sinai to Egypt, and that Camp David itself will break down.
Thus, a breakthrough on the West Bank and Gaza will take major changes on the part of all parties -- confidence, moderation, maturity. The question is: In which direc tion are events leading?