MIDEAST : As Talks Stall, ‘Gaza First’ Gains Appeal for Israelis as Way to Get Ball Rolling : Some see letting go of the volatile region as a gambit in the game of peace.

Stones the size of grapefruit were already crashing down from roofs when the Israeli army lieutenant called out to his patrol, “Enough--let’s go home!”

“Look, we were there to maintain a bit of a presence,” explained the young officer, who may be identified only as “Danny” under Israeli censorship regulations. “But I have stricter orders not to get my men hurt and to avoid civilian casualties. So, what was the point in going down that street?”

The patrol’s tactical retreat at the end of a long, hot day in Gaza City’s garbage-strewn streets was, in many ways, symbolic of the withdrawal from the whole Gaza Strip that Israelis are considering increasingly as negotiations with Palestinians over self-government drag on.

“I am quite pessimistic about reaching an agreement in the near future,” said Shlomo Gazit, a retired general and former head of military intelligence. “If those talks fail, we should make a unilateral statement announcing our withdrawal from Gaza and calling on the Palestinians to negotiate so that our pullout would be orderly and chaos would not follow.”

Although leftist Israeli politicians, including members of Prime Minister Yitzhak Rabin’s Cabinet, began pushing six months ago for withdrawal from Gaza, finding it dangerously ungovernable, Gazit took a hard look at all the options and drafted a “Gaza first” scenario. He believes it would, in time, bring agreement on the West Bank and resolution of the Palestinian problem.

The core of Gazit’s approach is to announce, a year in advance, Israel’s unilateral withdrawal from the densely populated strip along the Mediterranean coast, then to discuss political, security and economic arrangements for it with residents and possibly the Palestine Liberation Organization.

“The great advantage of this option is that it does not require prior Arab agreement,” Gazit said. “It leaves the Palestinians to choose between an orderly takeover and the inevitable chaos and bloodshed that would be brought on by their refusal to coordinate with Israel.”

Gaza presents few of the problems the West Bank poses for Israel--there are no great Jewish or historical ties to the area, there are only 4,000 Israeli settlers among its 830,000 residents and potential military and terrorist threats to Israeli security are “minor,” according to Gazit.

“This could be the No. 1 confidence-building measure,” said Gazit, a senior analyst at Tel Aviv University’s Jaffee Center for Strategic Studies. “If it proves successful, it will make it much, much easier in three, five, 10 years to accept that Palestinians can be trusted, that they can control their people, that they represent no security threat to Israel.”

Gazit has no doubt that, under his proposal, Gaza would quickly become a Palestinian ministate (territory: 145 square miles), probably under PLO leadership with Yasser Arafat as president.

Rabin, who initially rejected “Gaza first” for this reason, has offered Palestinians in the negotiations on self-government immediate control of the region’s administration once basic tenets are agreed upon for autonomy; he is studying Gazit’s scenario, which goes further, as an alternative should the talks fail.

But Israeli critics warn that the most radical and violent of Palestinian political groups would probably seize power in Gaza under the plan, that the region’s severe economic and social problems (per capita GNP is $745 a year, unemployment is nearly 60%) would add to the instability and mortar, rocket and artillery attacks could be launched from within Gaza against Israel.

Palestinian leaders are reluctant to accept a “Gaza first” approach, fearing that it would end negotiations on self-government and free Israel from the pressure imposed by the constant turmoil here.

“We are part of Palestine, just as the West Bank is part of Palestine,” Mansour Shawa, president of the Gaza Citrus Exporters Assn. and a member of a big landowning family, commented. “The idea of ‘Gaza first’ must not be ‘Gaza alone’--there would have to be more, links to Jericho and Nablus, commitments on the next step. . . .

“If Israel just left, it would indeed be chaos,” Shawa added.

“There are no guarantees this will work--there is no perfect option,” Gazit said. “But the question for Israel is no longer whether to withdraw from Gaza, but how to withdraw.”