Palestinians Ill-Prepared for New Climate : Mideast: A PLO power struggle and disagreement on negotiation goals cause paralysis at a time when change in Israel means opportunity knocks.

Palestinians, who for months have complained that Prime Minister Yitzhak Shamir was dragging his feet in Middle East peace talks, are now concerned that Prime Minister-elect Yitzhak Rabin will present them with sweeping proposals that they are unprepared to begin bargaining over.

Causes for Palestinian feelings of paralysis are many.

A power struggle is under way in the Palestine Liberation Organization among members who feel that although PLO Chairman Yasser Arafat survived a recent air crash, his health is weakening along with his political standing.

Palestinian leaders from the West Bank and Gaza Strip are under attack from anti-talk forces and feel that they must prove their own credentials by meeting openly with Arafat, despite American and Israeli objections.

Seven months into the negotiations, debate still rages among Palestinians over whether to negotiate in small steps or try to win sweeping concessions toward the Palestinian goal of independence.

“Some think that we have to get a guarantee on the end results of negotiations,” said a member of the Palestinian negotiating team.

The indecision persists at a time when Rabin has emerged with proposals that dovetail with demands of the Palestinian negotiators themselves: elections in the West Bank and Gaza Strip for a kind of Palestinian legislature.

Renewed peace talks are still several weeks away, but Palestinian observers say their leaders are bracing for pressure.

“We are going to be told by Washington that this is the best Israeli government we can expect, with the fullest chance for peace,” said Mahdi Abdul Hadi, a Palestinian political analyst.

Much of the Palestinian activity centers on trying to create a unified, pro-PLO structure in the West Bank and Gaza Strip to face elections and govern once self-rule begins. The main Fatah faction of the PLO has set up committees throughout the occupied enclaves to study needs for health care, education, utilities, economic development and other government functions.

Fatah, under the West Bank guidance of Faisal Husseini and Sari Nusseibeh, is also designing a two-tier election system to ensure a PLO majority in the elected 180-member Assembly. The system would include elections by region and by at-large party lists.

The Palestinians are floating proposals for a withdrawal of Israeli troops from West Bank cities and from roads connecting them. U.N. observers would oversee the election. The plan, published in a Jordanian newspaper, essentially would establish a U.N. governor over the disputed territories, a long-sought goal of the Palestinians that the Israelis have rejected.

Palestinian leaders reacted favorably to Rabin’s election, although political considerations impelled them to mute their enthusiasm. Rabin, as a Cabinet minister, was responsible for quelling the early months of the Palestinian uprising in the territories with harsh measures.

Shamir’s defeat was greeted with less restraint. “The Palestinian side welcomes the defeat of the Israeli right wing and insists that the new government take measures to withdraw from the occupied territories and achieve peace for both nations,” wrote the Jerusalem Arabic-language newspaper Al Quds.

Most members of the Palestinian talks delegation traveled to Jordan in recent weeks to meet with Arafat and PLO officials. Because they met with Arafat openly, they may face criminal charges when they return home under Israel’s anti-terrorism laws that forbid meeting with the PLO.