"It is the beginning of the end the occupation," said Suleiman Khatib, a retired teacher who had put on a pin stripe suit to celebrate Mr Arafat's arrival. At the end of the day the 400 Israeli settlers, who hold a fifth of Hebron, were "just a drop in the sea compared to the 130,000 Palestinians here," he said.
Not that Mr Khatib believed Hebron's troubles were over in the short term: "The settlers see their dream [of taking over Hebron] is dying and everybody will resist death." He feared an attack. Others in the crowd said they were happy rather than euphoric. Ghassan Shahin was glad that Hebron university, where he taught computer science, was open again after nine months.
"But if there is no Palestinian state and Hebron stays an isolated canton like Nablus and Ramallah, there will be no peace," he said.
Speaking from a balcony in the military headquarters an ugly building built during the British Mandate, the Palestinian leader was in a conciliatory mood. "I tell settlers we do not want a confrontation," Mr Arafat said. Palestinian women prisoners would released in a few days. So would Sheikh Ahmed Yassin, the blind leader of Hamas, the Islamic movement, who is held in an Israeli prison. He said: "Hebron is a springboard ... so that we can establish our independent Palestinian state."
In his office in the centre of Hebron, Khalid Amayreh, an Islamic commentator who has little sympathy for Mr Arafat said that feelings in the city were ambivalent: "Remember that 70 per cent of people in the city have known no rule other than the Israeli army," He did not think that the settlers were planning another massacre, like that of Baruch Goldstein who killed 29 worshippers in the mosque in 1994. "But they may start a reign of terror to drive people out of the Casbah [the old covered market] in the Old City," he said.
Traders in the narrow streets of the Casbah, which remains under Israeli control, were worried. Jamal Maraga, selling embroidered dresses and sheepskin coats, said: "If the [Israeli] army takes care of the settlers, then maybe things will get better. People are frightened of another massacre like that in the mosque."
So far the settlers are belligerent but appear uncertain what to do. Their children mutter "slimeballs" in Hebrew at the foreign journalists. A Palestinian cameramen had a finger broken by a settler with a rifle. They reacted angrily yesterday to a speech by Jibril Rajoub, head of the Palestinian Preventive Security Service, who is moving his headquarters to Hebron from Jericho. He accused them of fomenting hate and suggested the city would be better off without them. "They are big stones on our chest and we have to take them off," he said.
Ironically, Mr Rajoub is said by the Israeli press to have allocated plain clothesmen to shadow settler leaders to prevent them being assassinated.
A bizarre aspect of the security arrangements in Hebron, negotiated in 1995 and spelled out in the protocol signed last week, is that what has happened is very different from the accord. Officially there are 400 uniformed Palestinian police in the city. In practice security, with Israeli assent, is largely in the hands of the Preventive Security Service - the militants of Fatah, Mr Arafat's political movement - who have another 1,000 men under arms.
Mr Amayreh says: "For every Palestinian policeman in uniform there must three who are not." Some Israeli collaborators have been rounded up and Mr Arafat's opponents wonder if they will be next in line.
Rafiq al-Natsche, a member of the Palestinian Legislative Council, says a security clamp down would be dangerous because everybody in Hebron is a member of a tribe - his own is 20,000 strong - which will come to his defence. Mr Rajoub promises his men will obey the law.Reuse content