Arafat Tells Christopher of Prospect for More Violence : Gaza Strip: PLO chief says self-rule will not be successful without $2.4 billion in promised aid.

During a Thursday visit by U.S. Secretary of State Warren Christopher to the newly autonomous government in the squalid Gaza Strip, PLO Chairman Yasser Arafat warned of increased violence unless international donors come through with promises of $2.4 billion in aid to transform the Palestinian self-rule into reality.

“The Gaza Strip has arrived to the red line of starvation,” Arafat said at a news conference, adding, “This has to be changed.”

The humiliation and frustration of Palestinian workers, he insisted, has produced a “very dramatic situation.”

On Sunday, two people were killed and almost 100 were injured in riots triggered by thousands of frustrated Palestinians barred from working in Israel. Unemployment in Gaza, home to almost 1 million Palestinians, is estimated to be nearly 60%.

In a move certain to create controversy in Israel, Arafat also declared Thursday that Israel has no right to invite Jordan’s King Hussein to Jerusalem as part of the separate Israeli-Jordanian peace process. He said that right was reserved for him only as leader of the Palestinian people.

“It is my duty and my responsibility to offer the invitations to all my brothers and to all my friends to visit the holy city, and the holy Christian and Muslim places in the holy city,” said Arafat, who wore his familiar drab green fatigues but not his trademark holster for the meeting with Christopher.

Arafat then invited the Jordanian monarch to visit Jerusalem’s Islamic shrines with him.

His remarks triggered an immediate backlash.

“I didn’t know that Arafat had a mandate over Jerusalem,” said Foreign Minister Shimon Peres at a reception for Egypt’s National Day in Tel Aviv. Prime Minister Yitzhak Rabin was “furious” but refused to comment, according to an Israeli official.

Arafat’s statement also carried implications for Hussein, who considers himself the guardian of Jerusalem’s holy places. It was interpreted as a warning to the king not to unilaterally visit Jerusalem. Over the past year, the monarch gave $65 million to restore the historic facilities.

But the primary focus of the trip by Christopher, the highest-ranking foreign official to visit since Arafat’s arrival July 1, was the Palestinian economic crisis.

After their 90-minute exchange, Christopher acknowledged that the new Palestinian Authority in Gaza and Jericho faces “a time-urgent situation. . . . Clearly, the Palestinians face a very difficult time here. It will not be easy for them, but I urge them to work through it with determination.”

Christopher said he assured Arafat that the United States, international community and Israel all “have a large stake in the success of this enterprise.”

But in blunt language, he also told the Palestine Liberation Organization chairman that the new government must show it can handle the loans responsibly and can account for how donors’ money gets spent. He said they held “sober and serious” talks about donors’ need for documentation.

Part of the problem is that for more than two decades, the PLO had a reputation of corruption and undocumented spending. But the new government also is still unfamiliar with basic functions, from designing project proposals for aid to setting up payrolls.

Christopher was accompanied by Joan Spiro, the undersecretary of state for economic affairs, who will remain behind to advise the Palestinians on procedures to satisfy international donors and financial institutions.

The scope of the problem facing Arafat was visible as Christopher’s delegation drove through Gaza. In stark contrast to the modern roads and buildings on the Israeli side of the new sandy border, even the main streets of Gaza are littered with masses of garbage; the walls here are covered with graffiti. Christopher entered through the Erez crossing where the riots erupted Sunday.

After the session, Nabil Shaath, the Palestinian planning minister, told reporters: “The euphoria has passed. Now is the time for action.”

Arafat praised the Clinton Administration for its support. “We have found a real friend in the White House. It is President Clinton, and we are sure you will help us,” Arafat said, telling the U.S. delegation, “I’m sure that with your help, we’ll be able to touch the fruits of the peace.”

Christopher also held two rounds of talks Thursday with Rabin about efforts to find terms for peace with Syria. In Egypt earlier in the day, Peres said the peace process would not be truly comprehensive until Syria is included.

“We cannot leave any open wounds on the body of the politics in the Middle East,” he added. Since the announcement of a breakthrough between Jordan and Israel last week, the Israeli government has taken pains to make clear that it does not intend to isolate Syria from the peace process.

Christopher will wrap up his weeklong peacemaking effort with a stop today in Syria for talks with President Hafez Assad.