ANALYSIS : Stakes Rise for All Players in Mideast Game of Peace

The Palestine Liberation Organization has found itself abruptly dealt out of a poker game that it had only recently sat down to play. Now, a variety of diplomats and analysts say, PLO Chairman Yasser Arafat faces the task of convincing the world that he still has control of his own hand: a deeply divided cadre of militants who have grown increasingly restless playing Arafat’s version of moderation.

At the same time, they said, the U.S. decision this week to suspend its 18-month-old dialogue with the PLO leaves the Middle East open to more dangerous players and may place even more pressure on Israel to produce results in a game in which it is suddenly setting the rules.

“What’s happened is we’ve cut out a lot of the middle ground,” said one analyst close to the peace negotiations. “The moderates are the ones that lost the most in the last 24 hours, and there isn’t a lot of room in the field to play right now.”

Arguing behind closed doors in Baghdad, Iraq, for more than 24 hours, the PLO executive committee finally emerged late Thursday with a response to suspension of the dialogue. That response offered, as a token to the moderates, an investigation of the May 30 raid on Israeli beaches by a Palestinian faction, and, to satisfy radicals increasingly disenchanted with Arafat’s policy of moderation, five pages of bitter rebukes directed at Israel and the United States.

“Right now, it’s very difficult for Arafat,” said one Middle East analyst. “He’s either got to admit he doesn’t control some of his own elements, which he doesn’t, or he’s got to condemn one of his own elements, which again would be hard to do. Anyone who thinks Arafat really can control every faction of the PLO really is living in a very unrealistic world.”

Yet, in their demand that the PLO condemn the speedboat raid by the Palestine Liberation Front, a faction of the PLO, and expel its leader, Abul Abbas, from the PLO Executive Committee, U.S. officials have indicated that they want more than a renewed vow that the PLO has given up terrorism: They want assurances that, when they sit down in any dialogue with Arafat, they are talking to the PLO--all of it.

With the Palestinian community spread among the 1.7 million Palestinians living in the Israeli-occupied West Bank and Gaza Strip and 3.5 million more in cities and refugee camps all over the Arab world, among guerrilla groups in Lebanon and militant Palestinian factions in Damascus, that expectation may be hard to live up to, analysts say.

Egyptian officials believe the U.S. decision to cut off direct contacts with the PLO leadership won’t help Arafat consolidate his grip on the organization. Quite the contrary.

“The moderates among the Palestinians are losing their credibility, and if they lose their credibility, there will be no moderation between Arabs and Israel,” said Tahseen Basheer, a former diplomat and government analyst.

“Egypt sees the only hope for (keeping) the Middle East from entering into a blind alley of despair is through moderation,” he said. “We understand the frustration. We are also frustrated. But we shouldn’t allow frustration to take the best of us. We are trying to maintain some sanity in a process which, if left to slide, will slide into blind, black despair.”

Accordingly, no one is ruling out the possibility that Egypt, which in recent months has acted as an intermediary to help set up a direct dialogue between Palestinians and Israelis in Cairo, could temporarily step in and take on the U.S. role to maintain some forward momentum in the peace process.

“Obviously, a dialogue with the U.S. enhances the possibility of success, but the peace process itself can still take place--it’s not totally dependent on a U.S.-PLO dialogue,” said one official.

In fact, according to sources close to the talks, the U.S. dialogue with the PLO never was used as a vehicle for negotiating critical points of diplomacy--to the Palestinians’ chagrin.

Rather, the three formal sessions and more than 40 informal contacts between the PLO and the U.S. ambassador to Tunisia, Robert H. Pelletreau Jr., were primarily designed by the United States to open lines of communication and resolve a variety of minor points that could have become major stumbling blocks to the peace process.

PLO officials wanted more: They wanted to talk immediately about convening an international conference on peace in the Middle East, a definition of self-determination for the Palestinians and official recognition of the PLO as the representative of the Palestinians.

“There’s been a feeling within the PLO that the U.S. did not live up to its commitment to have a substantive dialogue with the PLO,” Jamil Hilal, head of the PLO information department, said in a recent interview in Tunis.

The United States felt it was “unrealistic” to take on such major issues at a time when the two sides were only beginning to get to know each other, Western observers of the talks said, and instead attempted to “create an atmosphere that might sustain negotiation.”

And so U.S. and Palestinian representatives started by discussing more particular points--the level of violence in the occupied territories and cross-border raids undertaken by PLO operatives--with some levels of success. Some officials credit the dialogue with preventing Arafat’s recent talk of seeking a visa to address the United Nations in New York--a request that would have ignited a political firestorm for the State Department--from ever coming to a boil. For all the PLO’s posturing, no official visa application was ever made.

“I think it’s documentable that there was a vastly reduced number of what some might say were terrorist actions against Israel when the dialogue was taking place, inside and outside the territories, and one could sense the leadership was really trying to hold down the level of violence from within,” said one analyst.

Gradually, the subject of elections of Palestinian leaders in the occupied territories emerged as a point of discussion, and when Egyptian President Hosni Mubarak last summer proposed a plan for brokering discussions of the elections, the focus of the U.S.-PLO dialogue moved from Tunis to Cairo.

Again, the PLO was frustrated, especially since its role in the negotiations was limited to whispering in the ear of the Egyptians.

“What they (the U.S.) did was to downgrade the dialogue with the PLO by creating a second channel through the Egyptians,” Hilal complained.

Even if the Egyptians are now able to pick up where the United States officially left off, no one is expecting any progress in peace talks until Israel’s new hard-line government makes the first move.

Ironically, many analysts expect the suspension of the U.S.-PLO dialogue will put even more pressure on Israel to make progress for peace: to put up or shut up, now that it has got what it wanted.

“There are fewer reasons now for Israel not to engage,” said one analyst. “And the same is true for the Americans. Having an ongoing peace process allowed them to dodge a whole lot of bullets. Without a peace process now, without a dialogue, they’re going to have to confront each and every issue as it goes by. They can’t fall back on a peace process. They can’t fall back on a dialogue. So the Israelis are really exposed.”

There have been reports this week that Israel’s new defense minister, Moshe Arens, will try to open talks with West Bank Palestinian leaders, including Faisal Husseini and Sari Nusseibeh, both of whom are closely identified with the PLO. The talks would outline temporary means of reducing tensions in the West Bank and Gaza Strip as a prelude to negotiations over the final status of the territories, which the Shamir-led government believes should remain in Israel’s control.

In any case, the United States now faces a dilemma with Israel in any discussion about resuming talks with the Palestinians. Israel has made it clear it believes the dialogue suspension should be permanent. What kind of reward would it be to restart the talks just as Israel begins making independent progress toward peace?

“It’s rather difficult, if they are forthcoming, to sort of punish them by starting the talks again,” said Andrew Duncan, a Middle East specialist with London’s International Institute for Strategic Studies. “At the same time, starting the talks again would be helpful in getting things rolling once the Israelis unblock it. . . . The Israelis, of course, can’t have it both ways.”

Times staff writer Daniel Williams, in Jerusalem, contributed to this report.