Efforts by Algeria to help Syrian President Hafez Assad and Palestinian leader Yasser Arafat mend their fences have collapsed. Unable to convene its Palestine National Council (the parliament-in-exile), the Palestine Liberation Organization is badly split. It is unable to speak with one voice and its credibility is badly shaken, according to Arab sources.
''No solution is in sight. The PLO's internal divisions reflect the deepening divisions in the Arab world,'' says an Arab diplomatic source.
The PLO no longer has a base from which to engage Israel militarily. It is widely dispersed. It has proved powerless to affect Israel's policies on the West Bank. And for the first time, the PLO was barely mentioned this year in speeches at a United Nations General Assembly. In the past it had received much more attention during the general debate, analysts here say.
Since the start of the year, South Yemen and Algeria have tried to work out a compromise between Arafat and Assad.
''They are both realists. Inasmuch as Assad failed to 'finish Arafat off' in Lebanon, both men should have put their personal feelings aside in the interest of the Palestinian cause. Arafat should have realized that Assad is a major player in the Middle East chess game. And Assad should have acknowledged the fact that the PLO, without Arafat, is like a body without a head,'' a North African diplomat says.
A tentative compromise was worked out last June in South Yemen between Arafat's Al-Fatah, the main PLO group, and four Syrian-based PLO groups: the Democratic Front, the Popular Front, the Liberation Front, and the Palestinian Communist Party. Arafat would continue to lead the PLO, but be assisted by two, presumably pro-Syrian, aides. His freedom of action would have been somewhat curtailed. But he would not have become a Syrian puppet.
''Arafat was willing to settle for half a loaf but Assad rejected any formula short of Arafat's abject surrender,'' says an informed Arab source.
The Palestine National Council was supposed to meet in Algiers this fall to approve the deal and to display the PLO's reunification.
Last month Assad traveled to Algeria and urged Algerian President Chadli Benjedid not to host the planned council meeting under the present circumstances because it would be tantamount to taking sides in a dispute touching on Syrian vital interests.
''The recent polarization among Arabs, with Jordan and Iraq mending fences with Egypt and with Syria becoming more isolated, has not helped matters,'' says a senior Middle East watcher.
''The last thing Assad wants is a PLO that has the option of accepting its marching orders from Amman, Cairo, or Baghdad. As far as Syria is concerned, it is better to have no PLO than an independent one. From the start the PLO's basic error has been to allow itself to become dependent on various Arab countries. Each of them always tried to use the PLO for its own purposes.''