NEWS ANALYSIS : PLO's Back-Seat Status at Talks Shows Shifting of Power Among Palestinians

TIMES STAFF WRITER

Heralded by Palestinian willingness to compromise in upcoming peace talks with Israel, a landmark shift in power and responsibility is under way that threatens the central role of the exiled Palestine Liberation Organization, the driving force of Palestinian nationalism for 27 turbulent years.

Influence is passing to leaders in the occupied West Bank and Gaza Strip who have long sought greater power and recently have had it thrust upon them by the restrictions on open PLO participation in the Madrid peace conference, scheduled to begin Oct. 30.

West Bank and Gaza leaders uniformly pledge allegiance to the PLO and its leader Yasser Arafat, but it is clear that their interests are different. The PLO, banned by Israel and the United States from Madrid, is to stage-manage its negotiating teams from afar, but it is evident that ideas emerge from the occupied land, not from PLO headquarters in Tunisia.

The West Bankers and Gazans are willing to accept solutions long rejected by the PLO and are openly dismissive of the maximalist demands that were once the hallmark of the organization. Especially, they seem to have taken to heart Secretary of State James A. Baker III's warning that they shouldn't miss the peace bus.

"The time for the luxury of ideology is over," said Hanan Ashrawi, a college educator who met with Baker during each of his eight peace missions to Jerusalem. "A change in reality requires a change in thinking. We can either take part in the fate of the Palestinians or be spectators.

"There are phases when the PLO in exile is more prominent and phases when the inside is," Ashrawi continued diplomatically. "This is a phase for the inside. The PLO is not being negated. It is there."

The very nature of the talks and the goals of the Palestinians threaten to put the PLO further, and perhaps permanently, on the margins.

On Sunday, Ashrawi and Faisal Husseini, who is currently the most prominent West Bank leader, outlined a step-by-step approach to Palestinian independence. Husseini will head a committee to oversee the Palestinian negotiators; Ashrawi is a member of that committee. Fourteen Palestinians are joining 14 delegates from Jordan in a combined negotiating team.

The proposal includes a five-year period of "self-government" in which West Bank and Gaza Strip Palestinians would run their own affairs. In no more than three years of self-government, talks on a "final status"--code for statehood--would begin, Husseini said.

If such a solution is worked out, de facto power would pass to the Palestinians in the West Bank and Gaza right away, while the PLO twiddles its thumbs abroad. The mechanisms of authority would be in place by the time statehood arrived and Arafat had a chance to get his passport stamped.

There is nothing shocking in this shift from PLO dominance, insisted Ashrawi, a university professor of literature who is considered a political independent. "We evolve into more of a government and away from being a national liberation movement," she explained.

For the moment, Arafat himself seems resigned to this possibility. He and a small group of advisers have been dealing directly with the West Bankers and Gazans, bypassing the ossified PLO bureaucracy and its well-fed professional diplomats, Palestinian activists here say. When Ashrawi went to Algiers recently to persuade the PLO's so-called "parliament in exile" to support peace talks, delegates were hounding her for information about what Arafat and "insiders" like her were cooking up.

Curiously, Israel could delay the weakening of the PLO by clinging to control of the West Bank and Gaza, denying the Palestinians a chance at statehood and giving fuel to PLO critics of compromise. Husseini expressed the irony, saying in understatement, "If Israel goes on oppressing and being stubborn, it will affect the relations among Palestinians."

Willingness to accept five-year self-government rather than immediate statehood has struck some Palestinians as surrender. To non-Palestinians, it seems to be something that could have been won a decade ago: Such a formula was suggested in the Camp David peace accords between Israel and Egypt.

"Yes, with immaculate hindsight, you could say that," Ashrawi answered. "But conditions are different."

The main new condition, in the view of both Ashrawi and Husseini, is that the United States, as the world's sole superpower, is expected to perform as a referee between Israel and the Arabs and not as a partisan of Israel, its close ally.

"This is a new game with new rules," said Husseini, who is a scion of an old Jerusalem family and has long been associated with the PLO. "The rule is international law."

No more than a year ago, such notions as "interim periods" and "self-government" were taboo among Palestinians, and the emergence of powerful "inside" leaders was seemingly impossible. But a lot happened in that year, and the very landscape in which the PLO was born and in which it operated all these years changed so much that it is a wonder to many that the group survives at all.

Iraq's defeat in the Persian Gulf War by U.S.-led forces robbed the PLO of one of its cherished possessions--an Arab state with military clout to openly threaten Israel. Iraq's loss smashed the myth of pan-Arab unity in which all Arabs were supposed to devote themselves to particular causes, especially the Palestinian. From the PLO's birth, it had always relied on Arab expressions of support--not to mention financial backing.

Once the PLO sided with Iraq, it became fashionable in anti-Baghdad capitals to bash the Palestinian cause. Both Kuwait, the victim of Iraq's aggression, and Saudi Arabia, America's oil ally and biggest wartime financial backer, had once been the PLO's chief bankrollers. Both have closed their pocketbooks to the PLO.

Meanwhile, events in the Soviet Union crushed fantasies that the PLO harbored about regaining an old powerful ally. The reversal of the August coup against Soviet President Mikhail S. Gorbachev ensured that the Soviet Union, and probably its spun-off republics, would not return to the aggressively pro-Palestinian stand of the Soviet past. Cheers about the attempted coup from several PLO leaders soon turned into a sullen silence.

The PLO was born in the middle of the Cold War, and the Soviet rivalry with the United States provided the PLO with important diplomatic and logistic succor.

Moscow and East Bloc governments and secret services provided weapons and training for terrorists and guerrillas. Fake passports were rarely a problem. Those days appear to be over; all the former Warsaw Pact nations have opened ties with Israel. Moscow did so last week.

The "double-whammy" of the defeat of Iraq and of the hard-liners in Moscow left the PLO holding one last, worn card: the rebellion in the West Bank and Gaza. The intifada, that Arab uprising, is fading, but it is all the PLO has.

However, the uprising, which is almost four years old, has been a challenge to the PLO itself. It took the tools of battle out of the PLO's hands and put them in the hands of teen-agers, who threw rocks and seemed to make a mockery of the PLO's tactics of "armed resistance." Inside leaders boasted that the PLO was working for them.

The emergence of a separate leadership has long been nightmare for the PLO and it made moves to undercut the intifada- nourished cadres. It reinforced factionalism by channeling money helter-skelter through the West Bank and Gaza. It took to editing the leaflets that gave direction to the citizens. As a result, the pamphlets soon became tedious and unreadable.

Israel did its part by deporting dozens of leaders and jailing hundreds more.

When fatigue and economic hardship took hold of the intifada, the PLO began to relive old dreams: that armed attack could upend Israel. In May, 1990, the PLO launched a raid on Tel Aviv beaches. The attack was a fiasco. The Israelis stopped the raiders before they fired a shot. But the message was not lost on the inside: The PLO was losing faith in the intifada.

Now, on the eve of peace talks, the PLO has returned to accommodating the inside. "It is the end of absolutes," Ashrawi said. "The end of slogans. Reality requires change. We can not be outside the course of history."

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