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Inside File: Oslo baffled by Arafat's flight of fancy

PERCEPTIONS of Yasser Arafat have differed more wildly than usual in recent weeks. They serve as a reminder of his ability to baffle the world. For a start, sources reveal, Mr Arafat has managed to upset none other than the midwives of his peace plan with Israel. He has told the Norwegian government that it has 'a moral obligation' to pay for the construction of an airport in Jericho, where he may or may not take up residence as a result of a successful settlement. Asked by baffled Norwegian officials why they should agree to this, Mr Arafat replied: 'How else will I get there?'

Norway, having brokered the secret talks that led to the Israeli-PLO agreement on Palestinian self-rule, has, of course, an interest second to none in wishing the Palestinians to prosper.

But for one thing, it is by no means certain that Mr Arafat will base himself permanently in Jericho; for another, a town of 15,000 people and comprising three dusty streets and a few banana plantations could probably make do with a helipad.

'It's a bit rich that while the Palestinians are supposed to inspire trust in their international donors, Arafat flies around on a celebration binge making demands like this, refusing to delegate on the factual issues and staying with huge entourages in places like the Dorchester Hotel,' said a European diplomat. 'Especially as there may not be much to celebrate at the moment.'

Another government with misgivings about investing in Mr Arafat is that of Spain; Madrid, host to the 1991 Middle East peace conference, had agreed to pay for the restoration of the Hisham Palace Hotel, due to serve as Mr Arafat's Jericho residence. A Spanish diplomat visited the hotel with a team of engineers in September. But the dilapidated building remains untouched today, not a pot of paint in sight.

The manager, Rajai Abdo, who had hoped Mr Arafat would make his hotel world famous, is despondent. The restoration cost was to have been dollars 1.6m ( pounds 1.07m). But the problem, Mr Abdo tells me, seems to be that the PLO has no money to pay for the lease, which he describes as 'peanuts' at dollars 70,000 a year.

That the PLO does not have dollars 70,000 to cough up for its own lease seems an odd claim. The Dutch government recently went against the consensus of the European Union to pledge the PLO dollars 20m for its own port in Gaza, and a further dollars 17m in pocket money.

It seems Mr Arafat made a singularly good impression during his recent visit to the Netherlands, traditionally perceived as one of the most pro-Israeli countries in Europe. 'He spoke with great optimism despite the current difficulties in the peace process and left a very positive impression,' said one diplomat. The chairman had been well briefed: 'His image was especially prepared for the Netherlands as a country seen to be especially friendly to Israel.'

It was likewise when Mr Arafat met Douglas Hurd in London this week. 'He was chirpy, perky, held a very sensible discussion, was quite optimistic and spoke in English throughout with no hesitation,' said a British official. When shown the guest-list for the official lunch, which included the Israeli ambassador and other Jewish dignitaries, he said: 'Very good. These are after all the people we are supposed to be making peace with.' Mr Arafat had clearly been well briefed for his first London visit too.

The Israelis had fretted a bit about the head-of-state-like treatment the British were according the PLO chairman. They had inquired of the Foreign Office beforehand whether he would be allowed to fly the Palestinian flag on the bonnet of his car. They were told that an organisation can fly any flag they like, which Mr Arafat duly did.

The Israelis are pleased, on the other hand, that the name of the PLO office in London has been changed from the mission of the Palestinian Liberation Organisation to simply the Palestinian Delegation. One Israeli official said. 'It means the peace is there. There is nothing left to liberate.'