THE horrific suicide bombings on Sunday by Islamic terrorists against Israelis in the Gaza Strip creates a dynamic that further polarizes the two peoples -- making the necessary steps toward any real reconciliation more difficult.
Israelis will feel less secure, more bitter about the idea of peace, and find their fears and prejudices reinforced. This makes it easier to justify tougher measures and crackdowns. Israeli Prime Minister Yitzhak Rabin talks about a ''separation'' of the two peoples that means no Palestinians in Israel.
Palestinians, already under a severe and debilitating occupation, will be likely to react to crackdowns with anger. This will further undercut PLO leader Yasser Arafat, whose Palestinian National Authority has yet to establish much authority.
But again, as before, the terrorism itself -- while ugly and destabilizing -- is not the issue to focus on in stopping violence. The terrorism is directly linked to the unjust conditions that Israel has created for Palestinians.
Gaza Strip is an overcrowded hellhole, a reservation for the natives in what used to be called Palestine. The Oslo peace process is viewed cynically by Israeli officials; it seems doubly wrong to Palestinians who see it as a sellout of their dreams. Even Norwegian officials who facilitated the negotiations now say that if they were Palestinians, they would be unhappy with the conditions in the territories -- where Israeli settlements continue to expand in the face of local Arabs.
Hence, the terrorism last weekend is not surprising. Terrorism is a substitute for war among a people who see no alternatives and have no resources. For three weeks Gaza has been under one of its worst closures; it now takes 12 hours for a single truck to cross three blocks from Gaza to Israeli territory. In a crushing occupation, what do the Israeli authorities expect young men to do?
At this point, perhaps only an outside broker such as the United States can break this cycle. Mr. Rabin's ''separation'' will only further disenfranchise Palestinians. Reconciliation cannot come without a recognition that something very wrong has taken place. Concessions beyond simply allowing Mr. Arafat to crack down on his people might undercut Hamas.
President Clinton should tell the US partner in the Middle East some hard and unpopular truths.