Next Step : Cleaning Up Arafat’s Image : The Palestinian leader hopes that using the jobless to collect Gaza’s garbage will solve two problems--and prove he can help the region.

Clinging to a low ridge overlooking the turquoise waters of the Mediterranean, this squalid refugee camp, a warren of cinder-block and corrugated tin, embodies two of Yasser Arafat’s most pressing problems as he tries to prove that Palestinians can govern themselves.

Beach Camp--and much of the rest of the Gaza Strip--is choked with unemployed men and uncollected garbage. As many as 60,000 people are believed to be crammed into the camp, and for decades they have been throwing their garbage over the ridge into the sea, or into a field just outside the camp that has become a vast, fetid dump bisected by the coastal road.

Now that Israeli troops have pulled out of Gaza, residents are free for the first time to walk along the seashore at any hour, a privilege the army had denied them for security reasons. But it takes hardy beach-goers to pick their way through the garbage and around the hulks of abandoned cars that lie half-submerged in the surf.

As head of the Palestinian Authority, Arafat is hoping he can produce a badly needed success for his infant bureaucracy by employing several thousand idle workers to clean up Beach Camp and other communities scattered across one of the filthiest places on earth.

Last week, Arafat signed an agreement with Japan and the United Nations for financing to start the cleanup campaign. The Palestinians hope to employ 17,000 people for nine months, at a cost of $19 million, to clear away tons of garbage in Gaza.

The Palestinian plan also calls for laying down a rudimentary infrastructure for the permanent collection and disposal of garbage. Gaza now has no functioning garbage trucks. There is no designated dump site; instead, people simply pitch garbage into any relatively open space or burn it in the street. Most of Gaza’s inadequate supply of garbage cans were destroyed during the intifada, the Palestinian uprising in the Israeli-occupied territories.

“The shebab (young men) used the garbage cans for roadblocks,” explained Samir Ghosheh, the Palestinians’ minister of labor.

The Japanese government donated $5 million to get the project going. Arafat’s wife, Suha Tawil, trooped out to the beach last week with a group of volunteers to launch a parallel citizens effort to tidy up. Tawil said she and her volunteers would be on the beach every day for two weeks, hoping to inspire a sense of communal pride in their surroundings among Gazans, who can find little else to take pride in beyond the presence of Palestinian police and flags on roads once patrolled by Israelis.

“The idea is to make Gaza look beautiful and to generate employment,” said Mohammed Shtayyeh, deputy director of the Palestinian Economic Council for Development and Reconstruction (PECDAR). “Our people have very high expectations of us. We want to show that we can produce. Otherwise, in a few months, the people will say we were much better off under occupation.”

But Shtayyeh acknowledged that the cleanup is hampered by the shortage of funds that plagues most of the authority’s efforts to make self-government work. “We have promises of several million more in donations, but they have yet to materialize,” Shtayyeh said. “We are hoping. Right now, we either can hire a quarter of the workers we need, or work for a quarter of the time we need.”

The campaign also suffers from the infighting that has troubled the Palestinians since former Palestine Liberation Organization guerrilla leaders--now filling posts as government ministers--began arriving in the territories from Tunisia, Jordan, Egypt and elsewhere in the Arab world. In many cases, the ministers of Arafat’s Cabinet have assumed posts that West Bank and Gaza residents believe the newcomers are unsuited to hold.

Ghosheh, the labor minister, has been in the territories for just two weeks. He shuttles between Jericho and Gaza, guarded by rifle-carrying bodyguards who were once PLO fighters.

Ghosheh conceded during an interview in his Gaza office that he is largely unfamiliar with the cleanup project, even though it offers the best hope of immediate, if temporary, employment for large numbers of Gazans. And he said that he disagrees with the idea of providing only short-term jobs.

“I believe that we should be concentrating on long-term employment,” Ghosheh said. “This is PECDAR’s plan. I worry that the people will complain in three months, when the money runs out. The opposition will accuse us of having done this just for show.”

But on the outskirts of Jerusalem, Shtayyeh, one of the economic council officials who designed the cleanup project, argued that the Palestinian Authority’s most pressing concern is how to immediately provide jobs for Palestinians. Unemployment in Gaza, home to about 850,000 people, is estimated to be as high as 70%. The situation was recently exacerbated when Israel drastically reduced the permits it grants to laborers to cross into Israel for jobs.

“Before March, there were 166,000 laborers working in Israel,” Shtayyeh said. “That number has been cut to 55,000. Only 28,000 are allowed in from Gaza.” The Israelis say the cutbacks were due to security concerns, and they continue to talk with the Palestinians about increasing the permits.

In a recent meeting with Israeli peace activists--and in an interview with the Israeli daily Haaretz, Arafat warned that there will be more riots like one at Erez Checkpoint on July 17--when frustrated laborers trying to get into Israel attacked Palestinian and Israeli police--if the economic situation in Gaza does not improve.

“I am in despair,” Arafat told Haaretz. “The moment of truth has arrived, and alarm bells are ringing. I am finding it harder and harder to go on in this situation, and the explosion is liable to come. Every day we are treated to a new dose of humiliation, and each is worse than the last.”

Arafat has been living in Gaza just since July 1, and he has been unable so far to generate jobs. In fact, Arafat has produced few visible improvements. New office furniture, computers and a plethora of secretaries, tea servers and bodyguards have appeared in the offices of the new ruling authority. But little progress has been made toward rejuvenating either Gaza or Jericho, the other territory that came under Palestinian rule with the historic peace accord between Israel and the PLO.

That is why the Palestinian Authority is pinning such hopes on the cleanup campaign, Shtayyeh said. He predicted that workers will be hired and sent into the streets and fields of Gaza before the end of the month.

“Arafat is with us on the telephone nearly every day,” Shtayyeh said. “He’s very keen to let the people feel that the Palestinian Authority is the authority working for the benefit of the people.”