Israel has drawn up radical plans under which Palestinian elections, scheduled for October, would be shelved and self-rule for the rest of the West Bank scaled down. Redeployment of Israeli forces in sensitive areas such as Hebron might not even happen, according to senior Israeli sources.
On the advice of his lawyers and generals Mr Rabin has begun to doubt whether Gaza-style autonomy, with Jewish settlements cordoned off, can be replicated in the West Bank where settlements intermesh with Arab towns and villages at every juncture. Furthermore, Mr Rabin may fear that extending full self-rule to the rest of the West Bank immediately will bring the Israeli opposition out in force, and could threaten his chances of winning the next election in 1996.
Palestinian self-rule is a five- year transitional phase. In two years' time talks begin on the final status of the lands, which the PLO hopes will be a Palestinian state and Israel hopes will mean a confederation with Jordan. Israel has chosen Mr Arafat - albeit reluctantly - as its partner in the peace process, and does not want to find itself negotiating the final status of the lands with a harder-line leader should Mr Arafat be toppled in elections. Instead, the government has drawn up plans under which Mr Arafat and his interim Palestinian National Authority could remain in power throughout the five-year transitional phase. The PNA would continue to run Gaza and Jericho, and would be given self-rule powers over the rest of the West Bank in about 15 non-contentious areas, such as education, health and taxation.
Mr Arafat, however, who swears in his transitional authority today, has shown new signs during his visit that he wishes elections to proceed, and wants self-rule, on the same scale as exists in Gaza and Jericho, swiftly extended to such major West bank cities as Nablus, Ramallah and Hebron - where none of the benefits of peace have yet been felt. Mr Arafat has been given only a moderately warm reception during his visit to Gaza so far, and he fears that if the process does not move swiftly, his support in the rest of the West Bank might plummet.
The dispute about what happens after Gaza and Jericho has been looming for some time, but has been kept low key, while the first phase of the process has been implemented. Now, however, the Gaza-Jericho phase looks suddenly simple, while extending self-rule to the rest of the West Bank, on terms agreeable to both sides, looks well-nigh impossible.
The main difficulty is that under the five-year transitional phase of self-rule, Israeli settlements are to stay in place, protected by the Israeli army. Palestinian autonomy, therefore, must be built to accommodate the continuing presence of the settlements. In the Gaza Strip, and the tiny enclave of Jericho, this has been possible to achieve as the number of settlements in these areas is limited and they have been easy to block off. In the West Bank, excluding east Jerusalem, however, 134 settlements, inhabited by 100,000 settlers, are spread among the 1 million Palestinians in Arab towns and villages.
With the growing realisation that Jews and Arabs cannot be blocked off from each other in the West Bank, Israeli officials are proposing a different type of self- rule here. First Israeli military redeployment would not be so extensive. Decisions about how Israeli forces will redeploy and to where, will be taken unilaterally by Israel with no negotiation. Israel need only be 'guided by the principle' that forces move out of centres of Arab population, as stipulated in the agreement, say officials, which leaves the door open for forces to stay in places such as Hebron where settlers live in the town.
Israel is also proposing that the Palestinian army, which has entered Gaza and Jericho under the guise of 'Palestinian police', will not be allowed to enter the Arab- populated areas of the West Bank after Israeli redeployment. Only locally recruited Palestinians, trained specifically as police, will be able to operate in these areas.
The problem for Israel when self-rule is extended to the West Bank is not just one of security. Arab and Jewish jurisdictions overlap in many areas of life - town planning, water resources, road building, and infrastructure, for example. Senior officials are advising Mr Rabin that Palestinians cannot be given autonomy in such areas, particularly autonomy with legislative powers. 'It will be a checkerboard throughout the territory,' said one senior official. Furthermore, the Israeli government does not want to hand over any powers which could be interpreted as 'sovereign' powers over West Bank land in the interim phase. While the Israeli government will be happy to get rid of the entire Gaza Strip, when final status talks begin, it will fight to keep large chunks of West Bank territory and does not want, therefore, to set any precedents on the issue of sovereignty.