Gulf War Still Rages for Arabs in Occupied Lands : Palestinians: Frustration mounts with massive unemployment. And fingers are pointed at the PLO.

In the chilly hour before dawn, the screeching of roosters and the muezzin’s hollow call to prayer spread over the squat, concrete huts of the refugee camp. A line of men stood like a shifting fence along the road, their faces illuminated darkly by the red taillights of a dozen fuming buses.

Thousands of them would board the buses for jobs in Tel Aviv and the surrounding suburbs, returning again after the sun has climbed and set on the other side of the camp. Hundreds would simply wait.

Since the end of the Persian Gulf War, residents of Gaza and the West Bank are no longer allowed to drive to work in Israel, and the workday often begins as a crap-shoot.

What employer will need Palestinian workers badly enough to send a bus all the way to Gazato fetch them? If they were needed this week, will they be needed next week? Or will a new Soviet or Ethiopian emigre living in Tel Aviv prove easier to hire? If the employer decides not to send the bus or the car, how will the workers collect last week’s wages?

An estimated 60% of the Palestinians in the occupied territories lost their jobs in Israel as a result of the war, and for those still working, the answers are, wait and see.

“Our life is like the life of a dog, and the lives of dogs are better than ours now,” said Ahmed, 35, an agricultural worker who stood on the roadside on a recent morning to see if any farmers needed help that day. He supports a family of 12 living in 1 1/2 rooms in Gaza’s legendary Jabaliya refugee camp, the birthplace of the intifada, or Palestinian uprising .

“They used to respect me in the past, and I had value for my work,” Ahmed said. “With the war, it became much worse. Now, unless we work with a whip on our backs all the time, we don’t survive.”

The Gulf War is still being waged in the West Bank and Gaza, where massive unemployment, sharply reduced agricultural production, a cutoff in wages sent home from family members in Kuwait and a virtual halt to tourism in the Holy Land have threatened to strangle the 3-year-old intifada more effectively than the Israeli army’s attempts to stamp it out.

Widespread Defections

There is growing frustration in the territories about the failure of the leadership of the Palestine Liberation Organization to produce results from a peace process that seems to be going nowhere. There is widespread sentiment that trying to deal with the Americans to make peace is a mistake. There have been widespread defections from PLO Chairman Yasser Arafat’s moderate Fatah faction, and many Palestinians admit that either the intifada itself gets a shot of new lifeblood soon, or it dies.

“The situation that has developed after the war, it is not a matter of if we can stand it for another two or three months or two or three years,” said Faisal Husseini, a key Palestinian leader from East Jerusalem. “It’s a matter of things cannot go on like this. The only way is to change the situation, the only option is to fight against this reality and to change it. . . .”

There is, said Samar Hawash, head of the Palestinian Working Women’s Committee in the West Bank city of Nablus, “a certain fatigue among the people. It’s not a moral fatigue. It’s an economic fatigue.”

Added another committee member: “It’s like people have been shot in the spine.”

All 1.75 million Palestinian residents of the occupied territories were placed under curfew for more than 40 days during the Gulf War, an action that caused factories to shut down, left employees unable to go to work and crops decaying in the fields.

Since the war, only those residents with no history of security or tax violations have received permits to return to work in Israel. The result: more than half the workers from the West Bank and Gaza--some estimates say as many as 100,000--have lost jobs. Travel restrictions between cities in the territories and to Jerusalem have made it difficult for factories to start up again and for farmers and businessmen to sell goods.

Total agricultural production is down 80%. Several West Bank economists have estimated that the total loss to the Palestinian economy during the crisis is about $600 million--more than a third of their total annual income.

The Israelis, recognizing the danger of economic meltdown in the territories, have issued more than two dozen permits for new factories, raised the amount of money Palestinians are allowed to bring in from Jordan, granted generous tax breaks for new businesses and gradually increased the number of permits for work in Israel.

“I think they realize . . . that restrictions and violence create more violence, and as responsible people they have to at least try other ways,” said Beit Jala businessman William Habib Shehadeh, who owns the largest bakery in the West Bank and who recently obtained a permit for a new oxygen and nitrogen plant. “It might calm the situation a little bit, but the uprising I don’t think will end until we have a political solution.”

90% Unemployment

In the rocky, hilltop village of Qifeen, north of Nablus, 2,500 people, or 90% of the work force, were employed in Israel before the war. Today, only 150 have jobs there.

Most families live on flour, olive oil and eggs--there has been almost no meat or vegetables since the war began. Fuel for the village water pump is expensive, so water has been pumped only twice a week. Raw sewage runs along the village’s dirt paths, and most villagers drink from buckets.

Many workers who have tried to get new permits to work in Israel have been told they must first pay back taxes--often 3,000 or 4,000 shekels ($1,300 to $1,800). That is money that would go for food, if it were there.

The men spend their days standing in clusters in the streets or sipping tea in the village reception hall. The Palestinian flag flutters from a telephone pole outside.

“The problem is, the Israeli authorities are trying to starve the Palestinians, and the Israelis think, because of this policy, they can impose any solution on us,” said Said, a Haifa construction worker whose job went to a Soviet emigre during the Gulf crisis. “We’d rather die than accept such solutions. Death, but not humiliation.”

There are those in the territories who quietly complain about the PLO alliance with Iraqi President Saddam Hussein, a policy for which they say they are paying the price daily. But in villages and cities throughout the West Bank and Gaza, it was clear there is still widespread support for Arafat and a sense that if Hussein is a false prophet, he is the only one the Palestinians have.

“To tell you the truth, we were really very, very happy to see the Scud missiles coming to Israel. Israel since 1967, and up to now, kept killing our children and our old men and our women--they killed more than 2,000 of them, and this is the first time we saw our enemy killed,” said Mohammed, a textile factory worker from the West Bank.

Even young, middle-class, professional Palestinians have not been untouched by the new radicalism brought by the war. At a wedding reception in East Jerusalem of a young, working Christian couple, a shopkeeper got up from dinner and raised his butter knife in the air.

“George Habash, God bless him!” he said, beginning to sway and swirl the knife in the air, singing of the radical leader of the Popular Front for the Liberation of Palestine. The crowd joined in. “The emir of Kuwait, go to hell!” they sang. The chant went on: “God bless Saddam Hussein!”

With money from the wealthy Gulf states cut off from the PLO, radical Islamic Palestinian groups, such as one called Hamas, are suddenly the best-financed. They all reject any notion of a political settlement with Israel.

Many estimates put support for Hamas as high as 40% in the Gaza Strip and up to 25% in the West Bank. Hamas’ own estimates range as high as 60% in Gaza and 50% in the West Bank. The group has demanded a substantial bloc of seats on the PLO’s ruling National Council and has denounced meetings between Husseini and other Palestinians from the occupied territories and U.S. Secretary of State James A. Baker III and any attempt to make peace with the “murderous occupiers.”

In a recent interview, a key Hamas leader from Gaza said that a growing number of Palestinians envision an Islamic state from Tel Aviv to the Persian Gulf and said the clear opposition among many Arabs to the presence of U.S. and European forces in the region during the war proved that coexistence is impossible.

“What we learned from the crisis was that when the Saudis stood with the Americans, both were in hell,” he declared. “Do you believe the American policy here is a peace process? . . . The policy of America is to destroy the Arab sanctions against Israel. The conflict in this area is not an Israeli-Palestinian conflict. It is actually civilization against civilization. . . . If the borders between the countries are eliminated and all the power put in one hand, the balance will be changed, and the American attitude will be changed.”

Tide of Radicalism

Hani Hassan, one of the PLO leadership’s key moderates, said it is growing harder and harder to hold the floodgates against Islamic radicalism. “They are there, Hamas and others, because we are failing,” he said. “When we meet them, they say to us, ‘Look, what have you done? We can change the equation.’

“I was talking not long ago to an Islamic man who lives in Israel, and he said to me, ‘Forty-three years we are telling our children what is there is not there.’ He meant telling his sons that there is no Israel. ‘Now we succeeded,’ he said. ‘Let them believe it. After 40 years, we have succeeded. We are now 800,000 (Arabs in Israel), we are now the strongest component in the society, our children believe the future is ours.’ He told me, ‘We are not happy just if the Israelis will withdraw from the West Bank. If you are coming to convince me of a political solution, please go away.’ ”

Hassan said that, while the PLO has opposed Jewish settlements in the West Bank, Islamic leaders from the territories have heralded them as a fulfillment of prophecies in the Koran that the end of the Jews will occur when they come to Palestine.

He shook his head. “Don’t you see?” he asked. “They go to the mosque to give thanks to God, the day of finishing is coming. Believe me, if you want to defeat them, you will not defeat them. Because they are living for the confrontation.”

In disturbing ways, the uprising has been slipping out of control, not only in the increasing influence of Muslim radicals but in factional violence between Hamas and Fatah supporters and in simple gang violence--against purported collaborators, thieves or simply members of other gangs. It has left more Palestinians dead this year at the hands of other Palestinians than by the Israeli army.

In Nablus one day in May, hundreds of people turned out at the old Casbah to watch a 10-minute beating of two men accused of stealing from area shops. Clashes broke out in Gaza between Hamas leaders seeking to impose Islamic dress codes on women and Palestinian leftists.

Last month, Hamas supporters in Nablus shot and wounded a Fatah activist, then broke into the room where doctors were operating on the man and stabbed him repeatedly in the chest.

“Today, we are afraid of ourselves more than anything else,” Palestinian activist Adnan Dumairi told a London newspaper. “We are afraid of our dream, which has turned into a nightmare. The revolution is devouring its own sons.”

The Fatah faction still holds sway in the territories. There was opposition, for example, to meetings between Palestinians and Baker--only 21% thought they were a good idea, a recent poll reported. Fatah, however, was able to push the talks through over their opposition.

But the Palestinian leadership in the territories, which has no official position in the PLO hierarchy, has been demanding more of a say in guiding policy; leaders in Tunis are realizing they must respond.

One of Arafat’s top lieutenants, Bassam abu Sharif, acknowledged there is a “very strong movement” to inject “new blood” into the PLO leadership and predicted changes below Arafat at the next meeting of the Palestine National Council.

Palestinian leaders say they also hope to redirect the intifada’s course, reducing the number of strike days and finding ways to attract the grass-roots support that nurtured the uprising during its early days.

But the intifada, they say, was never intended to be 10 years of throwing stones. In many ways, Palestinian leaders said, the intifada has become a state of mind: a permanent refusal in the minds of every Palestinian to accept the Israeli occupation of Arab lands.

“The intifada has become daily life. It is a part of self-explanation in the occupation,” said Mahmoud Zahar, a community leader from Gaza. “The intifada is a true jihad (holy war) against the occupation, but like any popular movement (it) may pass into hot states, and into remission, and change from the acute into a chronic state.”