Ms Bhutto offended Yitzhak Rabin, the Prime Minister of Israel, by failing to request his permission before announcing her intention to visit Yasser Arafat, chairman of the Palestine Liberation Organisation, and self-proclaimed President of Palestine, at his headquarters in the Gaza Strip. Yesterday Ms Bhutto cancelled the visit after a stiff ticking-off from Mr Rabin, which was followed by silence from Mr Arafat.
'The lady from Pakistan must be taught some manners,' said Mr Rabin. 'One doesn't announce in the media, 'I will come to Gaza.' A little courtesy in international relations is needed.' Farce aside, the bust-up over Ms Bhutto's visit has served as a timely reminder of the firm grip maintained by Israel over the so-called 'autonomous' regions of Gaza and Jericho, and of the impotence of Mr Arafat.
Under the terms of the Gaza-Jericho agreement, Mr Arafat has no powers in areas of Palestinian foreign policy and all his visitors must first seek permission from Israel and co-ordinate their arrival with the Israeli army. For Ms Bhutto to communicate with Israel would have been anathema. Pakistan does not recognise Israel, and is particularly hostile to the Rabin government's growing rapprochement with India.
Perhaps Ms Bhutto had not read the agreement when she unilaterally proposed her visit. But it seems it fell yesterday to a humiliated Mr Arafat to confirm to Ms Bhutto that she would indeed have to seek permission from Mr Rabin before the PLO could entertain her in Gaza. As Ms Bhutto called off her visit, there was some glee in Jerusalem. 'Had she asked permission we would have been happy to grant it,' said one official. 'She can't behave as if visiting the autonomy is the same as visiting England.'
The row distracted attention from the much-vaunted ratification of the latest agreement to be signed in the Oslo peace process, under which new powers are to be handed over to Palestinian administrators throughout Gaza and the West Bank. It was formally agreed that Palestinian officials would now direct policy in areas of education, health, taxation, social affairs and tourism. However, the handover has been greeted by Palestinians with little celebration. Power in these very limited areas was to have been transferred months ago.
In theory, under the timetable set out in the Declaration of Principles, Palestinian autonomy should be moving towards redeployment of Israeli forces throughout the West Bank and preparations for national elections for a Palestinian council that will run all Palestinian domestic affairs.
The areas in which powers have been transferred grants Mr Arafat's Authority some power over the Palestinian people and is viewed by the optimists as a small but significant step on the way to widespread autonomy and the beginnings of Palestinian statehood. But it is unlikely that ordinary Palestinians will experience any significant change in their quality of life.
For the foreseeable future all powers over security and territorial issues remain firmly in the hands of Israel.