Arafat, Palestinians Face a Winter of Discontent : Mideast: Refugees feel abandoned. Discord is rising even in group founded by PLO leader.

In the grip of the region’s first winter storm, the Balata refugee camp was so cold Friday that Hussam Khader’s breath was visible as he sat in his living room, explaining why he and other Palestinian refugees no longer trust PLO Chairman Yasser Arafat’s commitment to their cause.

Outside Khader’s relatively spacious house, the camp he was born in has not changed at all since the Palestine Liberation Organization signed its peace accord with Israel 14 months ago.

Balata is still dirty, crowded and filled with unemployed men with no job prospects.

And lately, the camp has been rife with rumors that even the U.N. Relief and Works Agency, which provides schooling, medical care and some food for Palestinian refugees, intends to shut down its services as a result of the peace accord.

“People are very anxious and fearful, because they know that any solution under the current agreement with the Israelis is going to keep them refugees,” Khader said. “Speaking from the refugee point of view, we have absolutely no trust in the Palestinian Authority as it is set up now.”

Khader, 33, is a spokesman for the Committee in Defense of Refugees--the latest opposition movement to challenge the policies of Arafat, who serves as PLO chairman and head of the Palestinian self-governing authority.

The committee formed four months ago with representatives from five of the West Bank’s 18 refugee camps. Its ostensible goal was to fight any decline in the U.N. agency’s services in the West Bank, where one-fourth of the population are registered refugees.

But the real target, Khader and other committee members freely admitted, is Arafat and the policies he is pursuing.

What makes this movement important is that it is led by activists of Fatah, a group that Arafat founded and which is based in the refugee camps that for years were his strongholds. That the movement exists at all is evidence of how Arafat’s political base is eroding as his self-rule government struggles to implement the peace accords.

At the moment, Israel is focused on the threat that the Islamic opposition poses to Arafat.

But many Palestinians believe that a potentially greater political threat to the beleaguered chairman comes from within Fatah--from activists whose anger with the Palestinian Authority and disillusionment with the peace process could precipitate a split within the organization.

A member of the Palestine National Council, the highest Palestinian legislative body, Khader also is chairman of the General Union of Palestinian Students. He noted with irony that he also holds a position in the very Palestinian Authority he criticizes--he is working in the Ministry of Youth and Sports.

All his adult life, Khader said, he believed in Fatah as the instrument of Palestinian liberation. As an activist in one of the most militant camps, he served time in prison for resisting the Israeli occupation.

“When I was in prison, I preached Fatah’s teachings with blind faith,” he recalled.

In 1988, Israel deported Khader as a leader of the intifada, the Palestinian uprising against Israeli occupation that erupted in the territories in 1987. He traveled to PLO headquarters in Tunis, Tunisia, where, he said, “I saw our leaders face to face. I learned hard lessons about these men. It’s not just that they do not practice democracy. They have no understanding of democracy.”

The Oslo peace accord produced one direct benefit for Khader: It let him move back to his home in Balata in April with his wife and two children.

But when Israel handed over most of the Gaza Strip and the West Bank town of Jericho to the Palestinians in May, Khader and other activists found themselves pushed aside by the Tunis-based, aging PLO bureaucrats that Arafat chose to staff the new self-governing authority.

Seven months of Palestinian self-rule in the Gaza Strip has left Khader and other Fatah activists in the West Bank and Gaza disillusioned and angry.

Their disgust deepened as international donors failed to deliver promised funding, as Israel pressured Arafat to crack down on the Islamic opposition and other opposition groups, as Arafat’s security forces grew.

Most of all, they have worried about Arafat’s style of governing.

Their fears were partially realized last month, when the Palestinian police opened fire on members of Hamas, the largest Islamic opposition movement, during a Gaza riot, killing at least 12 people and wounding at least 129.

“As a member of the Palestine National Council, I voted for a Palestinian independent state,” Khader said. “I also voted to go to Madrid, when peace talks began between Israel and the Arabs. But after seeing the reality on the ground of this peace agreement, I’m fearful. Arafat has appointed people to his government who have no ties to the revolution.”

Khader’s movement was born in the same camps that spawned the intifada. Its members are the same angry young men who squared off against troops in the streets that cold winter of 1987, when, Palestinians believe, they made Israelis pay a price for their occupation for the first time.

Now, Khader said, he and his friends fear that their lives may never change, that the refugees will become the forgotten Palestinians. In desperation, they are taking political aim at Arafat and his Gaza-based government.

Their primary accusation is that, by agreeing to leave the refugee issue for final-status talks with Israel that are not due to start until 1996, the Palestinian Authority is abandoning the refugees. They scoff at the notion that Israel will ever agree to let refugees return to homes they lost in 1948, when Israel was born, or in the 1967 Mideast War.

Khader said he dreams of one day forging a united front of refugees from camps in Jordan, Lebanon, Syria and the occupied territories--a front that will press both the United Nations and the Palestinian Authority to ensure that refugees win either the right to return home or compensation.

His committee’s first step has been to start publicly pressing the U.N. agency to restore services, which the committee alleges began to be cut back after the peace accord was signed.

The U.N. agency gives medical, educational and social services to about 2.5 million refugees in the occupied territories, Jordan, Lebanon and Syria. Khader and other committee members insist that its services to refugees have been declining since the PLO signed the Oslo accord.

But Brian Mitchell, the U.N. agency’s acting director in the West Bank, dismissed the claim.

“That’s all hooey,” he said in an interview, adding that his agency “will continue to provide its services as long as the refugee problem remains unresolved.”

There is a budget crisis, Mitchell said, that has prevented it from expanding its services for two years and forced it to freeze hiring staff.

But it continues to spend $330 million annually on refugees and will do so for the foreseeable future, he said.

In fact, the agency’s budget has been augmented, in one sense, by the peace accord: Donor states have funded a $90-million program that is supposed to go to development projects in the West Bank and Gaza.