NEWS ANALYSIS : Rabin-Arafat Partnership Survives a Critical Test : Mideast: The 2 leaders were yoked together in crisis over settler’s killing. Their credibility and the accords were at stake.

When Israeli Prime Minister Yitzhak Rabin and PLO Chairman Yasser Arafat took each other as “strategic partners” in the peace process, they yoked themselves together politically so that for one to profit, both had to do so--and that if either lost, both would.

The implications became clear over the weekend as the Israeli army identified five members of Arafat’s Fatah faction of the Palestine Liberation Organization as suspects in the slaying of an Israeli settler and Rabin demanded that Arafat condemn the killing and reiterate his cease-fire order prohibiting attacks on Israelis.

For Rabin, who had based Israel’s approach to the Palestinian issue on the recent accord he reached with the PLO, the slaying of settler Haim Mizrahi was a crucial test of Arafat’s willingness to uphold his partnership with Rabin and of his ability to honor agreements with Israel.

Through the killing of 11 Israelis, soldiers and civilians since reaching the agreement on Palestinian self-government, Rabin maintained that Arafat, Fatah and the PLO mainstream were honoring the accord and that radicals from militant Islamic groups were trying to undermine it with attacks on Israelis.

What Rabin now needed from Arafat was something that he had never done--to condemn a Fatah attack on an Israeli, and specifically the abduction and killing of an armed Israeli settler on the occupied West Bank.

At stake were Rabin’s credibility in pursuing negotiations with the PLO and his assurances of security for the settlers under Palestinian autonomy.

Rabin himself had predicted such a test. “A strategic decision has been taken by us, by me personally,” he told the newspaper Haaretz last month. “The PLO is the partner. From the moment we decided this, with all the difficulties it implies, it is with (the PLO) that the negotiations must be held, with which agreement must be reached, with which everything must be realized.”

For Arafat, the matter was equally pivotal, because he was required to denounce as unjustified terrorism an action by his Fatah followers and thus demonstrate his overriding personal commitment to the peaceful resolution of the Palestinian problem, renouncing the “armed struggle.”

Arafat’s command of PLO forces on the West Bank and Gaza Strip and their own discipline were also seriously in question, further jeopardizing in Israeli minds the agreement on Palestinian autonomy.

What Arafat needed to do was meet Rabin’s requirement for an acknowledgment of Fatah’s culpability, a declaration of remorse and a pledge to ensure there would be no further PLO breaches of the accord. But he had to do so in a way that did not diminish his stature in Palestinian ranks.

When the agreement was signed, Israeli commentator Ehud Yaari had called the Rabin-Arafat relationship “the glue that holds together the whole negotiating process.”

“The operative effect of this (Rabin-Arafat axis) is that close cooperation between the Israeli government and the Palestinian leadership will be necessary to keep the whole process from coming apart,” Yaari said.

But Mizrahi’s killing was a critical test, Israeli officials said, because not only were the suspects Fatah members, but they also had said in their confessions that they had reported the action to their superiors in Fatah.

Within a day of the Israeli disclosure, Arafat condemned Mizrahi’s slaying and called on all Palestinians to “stop violent acts to safeguard the peace process.”

With that spare declaration from Arafat, Rabin replied that Israel would proceed with the negotiations on Palestinian autonomy, including the withdrawal of Israeli troops from the Gaza Strip and the Jericho area on the West Bank.

“This is what we expect from him, and this is his test,” Police Minister Moshe Shahal said Sunday after the Israeli Cabinet’s weekly meeting.

Still, Arafat’s acknowledgment did not sit well, even in the Cabinet.

“The conclusion is that the PLO does not control what is happening in the field,” said Binyamin Ben-Eliezer, a retired general who heads the Housing Ministry.

Health Minister Chaim Ramon added, “It apparently will be very hard to prevent all of the cells that belonged to Fatah, or do not belong to Fatah, from acting.

“The question is,” Ramon said, “how will the PLO set its well-organized machinery into operation in the (occupied) territories when it finds out that an act such as this (is planned) or after a terrorist act is carried out? That is the question, and this is the PLO’s test.”

The government’s critics contended that the PLO had failed the test and that the peace accord consequently had been shown to be a danger to the nation.

“The Israeli government has accepted that Arafat cannot control Hamas terrorism,” declared the Council of Jewish Communities in Judea, Samaria and Gaza, the principal settlers group. “The government has even accepted that Arafat cannot control terrorism by PLO groups besides Fatah. Now it has become clear that Arafat cannot control terrorism by Fatah--or if he can, he is not doing so.”

Iris Mizrahi, the widow of the slain settler, dismissed Arafat’s statement as “worthless.”

“This serves Rabin because he wants, at any price, to go down in history as having signed the peace agreement,” she said Sunday. “I am sure that a lot more Jewish blood will be spilled.”

Yet Foreign Minister Shimon Peres, who had talked with Arafat by telephone Friday to urge him to condemn the slaying, said Sunday he felt that Arafat and the PLO had met the test.

“There is no doubt (the opponents of the Palestinian-Israeli accord) will make many more efforts to kill the peace process, and therefore our determined stance is so necessary,” Peres said.

“Under no circumstances will we let just anyone who takes out a knife or a gun kill the peace process. We won’t surrender to them.”