THE first violent clash between opposing Palestinian factions poses a vital test for Palestine Liberation Organization Chairman Yasser Arafat and the peace deal he signed with Israel 14 months ago.
But a weekend confrontation between Palestinian police and Islamic militants, which has left at least 17 people dead and more than 200 wounded, could help break a political stalemate that is threatening to deflate the accord as Mr. Arafat loses ground to his Palestinian opponents.
The showdown could force Israel to accept what many Palestinian intellectuals have been saying for months: The Israel-PLO peace accord is in crisis and on the verge of total collapse unless urgent steps are taken to rescue it.
Israel faces a difficult decision. If it acts to bolster Arafat's position, his waning credibility in Palestinian ranks could gain momentum.
``Any intervention on our part will create the impression that it is a conflict for or against Israel,'' Israeli Foreign Minister Shimon Peres told Israeli Radio yesterday.
A grim-faced Arafat, who is now fighting for his political survival against a sustained challenge from Islamic militants, has refrained from commenting on the fatal shootout for fear of inflaming a volatile situation that could spark an all-out civil war.
Shocked Arafat aides have made it clear that the PLO chairman will accept any bona fide offers of mediation, including those from the leaders of some 1 million Israeli Palestinians who could broker between warring Palestinian factions.
``They need our mediation,'' said Deputy Agriculture Minister Walid Sadek, the most senior Israeli Palestinian in the Rabin government.
``I'm afraid that any spark could re-ignite the situation in Gaza,'' he said Saturday. Palestinian Israelis also are divided between supporting the PLO or the Islamic movements.
The PLO-Hamas talks appeared to be foundering yesterday as Hamas leaders blamed Arafat and the Palestinian police for the killings.
``Arafat bears full responsibility for what happened. He is the source of decisionmaking in Gaza,'' said leading Hamas spokesman Mahmoud Zahar on Friday.
Fatah, Arafat's dominant PLO faction, Saturday accused Hamas directly of ``liquidating four Fatah members inside a Palestinian mosque with 9-mm revolvers.''
There is little optimism in political or diplomatic circles that today's scheduled Israel-PLO talks will produce a breakthrough that will lead to an Israeli troop withdrawal from the West Bank ahead of Palestinian elections.
But Israeli planners are already looking ahead to a more permanent agreement before elections are held.
``Israel will have to look seriously at the timetable of the accord, the position of Jewish settlements in Gaza and the West Bank, and the eventual position of Hamas,'' an Israeli official told the Monitor, implying that Israel could deal with Hamas as part of a Palestinian administration of national unity.
Israel, which has put relentless pressure on Arafat to crack down on Islamic militants the Israeli security forces could not contain, appears to have changed tack on the issue of Hamas.
Israeli Prime Minister Yitzhak Rabin, on a week-long visit to Washington to discuss the future of the ailing peace accord and the future of US aid to Israel with President Clinton, was clearly anxious to calm a tense and dangerous situation in Gaza.
``I propose we leave it to the Palestinians to deal with their internal matters,'' Mr. Rabin told Israel Radio Friday.
``It's up to Arafat now to find ways to rehabilitate his position. If we are seen to support him now, it will merely weaken him,'' the Israeli official said.
``If Mr. Arafat has exhausted his role ... then we'll have to see. There could be a change in relation to Hamas. There is not going to be a quick fix here,'' the official said.
The official said it is now clear that the May 1996 deadline for final status negotiations on the Israeli-occupied West Bank and the status of Jerusalem has to be brought forward so that a comprehensive settlement can be achieved before the process collapses in disarray.
``There is no doubt that we need to move quicker toward final status talks,'' the official said, adding that the Israeli government could not postpone crucial decisions like the status of Jerusalem until 1996 - the year of Israel's next general election.
Western diplomatic sources said Rabin could outline to Mr. Clinton a plan to speed negotiations by bringing forward talks in a grand compromise. The compromise could involve consolidating the scattered Jewish settlements and moving closer to the idea of a Palestinian state with Jerusalem as the capital of both Israel and Palestine.
The Palestinian Authority's senior official in Jerusalem told a meeting in San Francisco Saturday that there would be no peace until there is a total withdrawal of Israeli settlers from Gaza. There are about 5,000 Jewish settlers in heavily guarded compounds in Gaza.
``The Israelis must make the decision to withdraw entirely from the Gaza Strip,'' said Faisal Husseini. ``By keeping the situation as it is now ... there will continue to be instability in the area.''.
Ghassan al-Khatib, a former Palestinian negotiator and leading critic of the ailing accord, said the time had come to go back to the drawing board.
``Israel thought it could solve Gaza and move on to the West Bank. They have not solved Gaza or succeeded in postponing the West Bank. I think the Israelis are also reaching the conclusion that interim arrangements don't work. It is time to negotiate final agreements,'' he said.
The decision by Palestinian police to open fire on militant supporters of the two major Islamic groups - the Islamic Resistance Movement, Hamas, and the Islamic Jihad - was clearly taken in the heat of the moment outside the Palestine Mosque in Gaza City as stones rained upon them and shots were fired on both sides.
Crackdowns fed extremists
But it is clear that their presence and assertive pose is a direct result of Arafat's growing fear of the escalating challenge from Islamic extremists that has been fed - rather than contained -
by separate crackdowns on Hamas and Islamic Jihad over the past six weeks, which have led to almost 400 arrests.
The Gaza City shootings sparked rioting throughout the Israeli-occupied West Bank on the weekend as Islamic militants called on Arafat to charge those responsible for the killings and urged Palestinians to direct their anger at Israel.
Yesterday leaders of Hamas, appeared to row back slightly from a hard-line statement by leading Hamas spokesman Mahmoud Zahar Friday that placed personal liability on Arafat for the 14 Palestinian deaths in Gaza City.
A Palestinian died - and nine were wounded - in clashes with Israeli soldiers in the West Bank town of Tulkarm Saturday and one was killed at the joint Israeli-Palestinian checkpoint at the small Jewish settlement of Netzarim in Gaza.
Also on Saturday, an Israeli soldier was seriously wounded in a drive-by shooting at the checkpoint, which is now firmly established as a flashpoint in the showdown between Israel, the Palestinian Authority, and Islamic extremists. Netzarim was the scene 10 days ago of a suicide bombing that killed three Israeli soldiers.