COLUMN ONE : Governing a Weary, Wary Gaza : Arafat has needed the carrot and the stick to bring self-rule to a people used to hating authority. Many enjoy a new sense of security but fret over a bad economy and the slow pace of peace.

At summer camp in Yasser Arafat’s Gaza Strip, 150 teen-age boys stand at attention in haphazard uniforms and semi-straight rows, bellowing the Palestinian anthem as the red-black-and-green flag is lowered for nightfall.

The youths, offspring of the intifada--the rebellion against Israeli occupation--had arrived a few days earlier with cigarettes, playing cards and an attitude. Their counselors--former guerrillas--confiscated the booty and began teaching the reluctant young men to march in unison, sing in a group and collect trash in the neighborhood.

“We have young people who turn themselves into bombs for their country but don’t know how to keep it clean,” said camp director Salah Damari. “We are trying to build up what the occupation put down in the Palestinian people.”

Since Arafat’s euphoric return from exile a year ago, his Palestinian Authority has been working overtime to restore shattered values and unite a splintered people under a peace agreement that gives Palestinians only a fraction of the land and independence they sought.

From scratch, Arafat has been piecing together a limited government in a pseudo-state consisting of Gaza and the West Bank town of Jericho, trying to build up its authority among generations that have respected none.

Now, as Arafat prepares to expand his control of the West Bank under the second stage of his 1993 accord with Israel, Palestinians across the map are looking for clues to their future in Gaza’s real but uneven progress.

For most Gazans, the major success of the Palestinian Authority’s first year of rule is the overwhelming feeling of security it has given people. After a 27-year occupation, including several years of the intifada’s clashes, curfews and arrests, Palestinians now live in Gaza without fear.

They come out of their homes in droves to shop downtown or stroll a cleaned-up Mediterranean beachfront that most had not visited for years. Kids play in the streets instead of throwing stones. Not only are the Israeli soldiers gone and a Palestinian police force in their place, but Arafat has loosened the grip of Islamic fundamentalists, who imposed a rigid code of behavior in Gaza during the intifada, which began in December, 1987.

Men and women enjoy the simple pleasure of walking side by side in public through new parks and freshly paved streets. A few women have removed their head scarves in acts of liberation that not long ago would have earned them the wrath of fundamentalists.

“There is a modernization and liberalization of Gaza society,” said Terj Larson, the United Nations’ special coordinator for Gaza. “This is producing the most important foundation for the peace process.”

With carrot and stick, negotiation and arrests, Arafat has contained any immediate challenge from the fundamentalist groups Hamas and Islamic Jihad, which oppose the 1993 accord. Predictions of civil war that accompanied him home from exile have been put to rest.

This confidence can be seen in the rash of insurance companies now willing to put up money for life and property and in the dozens of new buildings rising from Gaza’s veil of dust into a contemporary skyline.

Despite these significant changes, Arafat’s Palestinian Authority is struggling to command respect from a population frustrated by the poor economy and slow pace of peace.

Disappointment Runs High

Disappointment with Arafat’s performance is running high among the 50% of Gazans with little or no work, and among middle-class intellectuals who think he is cutting a bad deal with the Israelis.

“Israelis are still in a position of power,” said Dr. Iyad Sarraj, a psychiatrist and director of the Gaza Community Mental Health Project. “The basic insult to our dignity has not been addressed. The political process has not given us anything we dreamed of at all.”

What Gazans dreamed of with Arafat’s arrival in July, 1994, was a Singapore-like state offering jobs, foreign investment and a quick improvement in living conditions for a people who are among the best-educated in the Arab world--all of this in a Palestinian state that many envision stretching one day from the Jordan River to the Mediterranean Sea, with no sign of Israel in between.

Peace has not worked out quite that way. Instead, the more than 850,000 Gazans have been largely imprisoned in the 145-square-mile strip, shut in by Israelis in the wake of attacks by Hamas and Islamic Jihad on Jews--such as the one that killed six Israelis in Ramat Gan last week--and restricted to a minimum number of permits for work and travel in Israel.

Gazans must pass through a cattle chute of checkpoints to leave the strip; Israelis have the final word on who may cross the fenced border.

“This is a jail where you can do what you want inside,” said film producer Lou abu Salem. “We feel freer inside Gaza, but we cannot get out.”

Israelis also control the movement of goods in and out of Gaza. After two Islamic suicide bombers killed 21 soldiers at a bus stop near the Israeli town of Netanya in January, the Israeli government closed Gaza to truck traffic for four months to pressure Arafat to clamp down on extremists. Without Israeli cement, construction came to a halt; Palestinian fruit and vegetable exports were left to rot in the sun.

The closure cost Gaza’s economy $500 million and a 90% drop in exports, said Isam Shawwa, an adviser to Arafat’s Ministry of Planning and International Cooperation.

Borders Generally Open

The borders are generally open now, but new, stiffer Israeli measures for monitoring trucks have slowed the flow of goods, raising the price of flour, sugar and other basics by as much as half. Meanwhile, about 15,000 Gazans are allowed into Israel to work each day, compared to about 56,000 during the intifada and 80,000 during harvests before.

Tens of thousands of Palestinians have found jobs in the new public sector and police force, but that has not been enough to lower unemployment.

“The economic situation is bad, and that is the most important thing to us,” said 21-year-old Najaw Khrwat. “We women see the hardship our fathers or husbands go through, and it all falls on us to make ends meet and keep the family together.”

A canopy of ripening grapes covers the patio where she served sweet coffee and pumpkin seeds on a recent evening to family and neighbors assessing the progress of their Palestinian government. Arafat gave the big jobs to undeserving outsiders returning from exile, complained one friend. These jobs belong to leaders of the intifada who fought and were jailed, he said.

“Some of the people who came back deserve what they have,” Khrwat disagreed. Her voice gathered force as she spoke out to the men before her. “And there have been other changes. Some women have gotten jobs in the Sulta [Palestinian Authority]. Nobody expected that. You can leave the house. There is a law to protect you now, and Palestinian police.”

An electrical outage brought the talk to a temporary halt until candles could be found. In the dim light, one member of the group issued his solemn judgment. “The peace agreement is not enough to measure up to the blood lost in Gaza,” said taxi driver Jala Hamdan.

Throughout Gaza, there is a feeling that price increases and the newly awakened public life are deepening the divide between the well-to-do and the poor. Restaurants are opening at the beach, but most people cannot afford them. The streets are being paved, but most people still walk or ride donkey carts. The pretty skyscrapers are out of reach.

The much-anticipated foreign investment that is needed to revive Gaza’s economy has not arrived, in part because of the stifling border closure but also because of disorganization and infighting among members of the Palestinian Authority. Many Gazans complain that the administration is setting up a “typically Arab” system of bribes and nepotism for securing everything from government contracts to building permits.

“I’m sure you saw us on TV dancing in the streets when Arafat returned,” said Zaid Aljourani, 25, an Arabic teacher hoping for a public school job. “Well, quickly we realized there were big problems ahead. The fact is, some people are being taken care of and others are neglected. There’s a layer down on the ground and a layer in the sky.”

Palestinians, accustomed to speaking their minds, do not hesitate to criticize Arafat aloud and in the company of strangers. One of their complaints is that he is stifling freedom of the press with pressure and arbitrary arrests. A new law includes an open-ended prohibition on reporting anything that might hamper Palestinian unity.

Justice Called Arbitrary

Human rights organizations such as Amnesty International also have accused Arafat of managing an arbitrary justice system and using secret, summary trials in military courts to convict Hamas and Islamic Jihad militants. American and Israeli officials have been willing to look the other way at these abuses when they are used to control fundamentalists.

The lessons of Gaza are unsettling to Palestinian residents of the West Bank. They fear similarly patchy justice and economic decline.

They dread limited sovereignty like that in Gaza, where Israelis still collect the water, electric and telephone bills and the only way to send a letter abroad is to take it to an Israeli mailbox. On top of this, Gazans continue to live with about 5,000 Jewish settlers uncomfortably in their midst.

West Bank residents know they face an even tougher map, one that looks more like Swiss cheese than a Palestinian state. There are seven Arab cities and more than 400 surrounding villages interspersed with scores of settlements housing at least 120,000 Jews.

That, and a porous 287-mile border along the so-called Green Line with Israel, makes the West Bank’s 1.2 million Palestinian residents harder to lock up than Gazans, but their lives may become equally difficult if they are forced to pass through multiple Israeli checkpoints on roads between Arab cities. Security--protection from Jewish settlers and Islamic fundamentalists alike--will be more difficult in the vast, chopped-up region.

So will administration. Once the Palestinians assume control over the entire area, they will be responsible for about 10 times the area currently under their wing. Expectations may be lower than when the authority arrived in Gaza, but demands on its services will be greater.

Members of the authority say they are better-equipped to take over the West Bank than they were when they arrived in Gaza. They have government ministries in place and a year of experience under their belts. After initial delays in Gaza, the authority established adequate systems of accounting to receive some of the $2.3 billion committed by foreign donors in October, 1993. About $500 million has been spent, some of that in the West Bank.

“The West Bank may not wait for us with open arms,” said Shawwa, the Planning Ministry adviser. “But they will benefit from our experience in Gaza.”