Last exit from Jericho?: The peace process is still moving. Its further progress is up to Rabin, says Sarah Helm

SO, the Israelis are starting to pull back from the occupied territories after all. Television has flashed the evidence to the world: watchtowers are being dismantled in the Gaza Strip and a police station evacuated in Jericho. Bases have been closed. And Palestinian deportees are being allowed home to help to prepare for a transfer of power. For the first time since 1967, the Israeli army appears to be in retreat from the West Bank and Gaza.

Such developments are bound to have dramatic impact, particularly after the Hebron massacre. Hebron, however, was never going to kill off the Oslo accords. Rather, the massacre has shown both sides that time is of the essence.

Now that implementation is imminent, this much-hailed peace plan is to face its real test. Can the Oslo accords deliver peace? And if so, what will that peace be? Clearly Yitzhak Rabin wants to be rid of the Gaza Strip and a change to the status quo in the West Bank. But how far will he go to make peace with Palestinians last? The debate about the viability of the Oslo plan was finely balanced before the Hebron massacre. It remains so today.

Optimists argue that since the Hebron massacre the peace process has entered a new, more hopeful phase. Shocked by the disruptive power of Hebron's Jewish extremists, Mr Rabin has put his foot on the accelerator. He has begun this early withdrawal precisely to shore up support for the accords, even before agreement on withdrawal from Gaza and Jericho, as a first phase, has been reached. Yesterday, when at least seven Israelis (many of them teenagers) were killed in a bomb attack - for which the Islamic resistance movement Hamas claimed responsibility - the Israeli government did not blink, and negotiations to sign the Gaza-Jericho agreement in Cairo continued.

The Oslo 'peace map' envisaged peace in three stages. First, Israel withdraws from the Gaza Strip and the West Bank town of Jericho. The Oslo deadline for completion of withdrawal is 13 April, and Yasser Arafat, chairman of the PLO, will then return to start preparing for the second phase, beginning with Palestinian elections, throughout the West Bank and Gaza, in July. The elected council will have limited powers of self-rule.

Throughout these first phases Jewish settlements are to remain in place, fully protected by the Israeli army, and the status of Jerusalem remains off the agenda. Within two years from the start of the Israeli withdrawal, the third phase of the process begins, with talks on the final status of the occupied territories. Only then can the issues of dismantling Jewish settlements be discussed; and only then can the status of Jerusalem be decided.

This staged peace plan was hailed by its creators as the only way to build confidence ahead of a final deal. Their argument was that once the peace bandwagon was in full swing, extremists on both sides would be isolated and the climate would be right for defusing what they called the two 'time-bombs' - settlements and Jerusalem.

Pessimists, however, have always argued that this phased approach was flawed. First, they say, what the 'self-rule' offers, first for Gaza and Jericho, then for the whole West Bank, is paltry and unworkable. As soon as Gaza and Jericho is implemented, they say, Palestinians will see the deal's limits and become disillusioned. Mr Arafat will be seen as a powerless leader and be brought down by in-fighting.

Furthermore, say pessimists, even if talks on the final status of the settlements and Jerusalem ultimately get under way, Mr Rabin has no intention of ceding sovereignty to the Palestinians over all the occupied territories. This is why, they say, he wants to keep the settlements, which take up about 60 per cent of the occupied territories. At best he is prepared to grant autonomy over the Gaza Strip and patches of the West Bank, while Jerusalem remains in Israel.

As withdrawal proceeds, the problems that will be encountered in the first phase are already emerging. Israel is not 'withdrawing' from Gaza and Jericho, it is 'redeploying'. While Palestinians welcome the removal of forces from Palestinian population centres in Gaza, they can see Israelis setting up new camps nearby.

The division of responsibility between the Israeli army, guarding the settlements, and the new Palestinian police, guarding the nearby Palestinian centres, has theoretically been agreed. But nobody believes it can run smoothly. There are to be 'joint patrols' along roads shared by settlers and Palestinians - led by an Israeli vehicle. Nobody has explained how such a patrol should respond if attacked by Palestinian militants. In addition, Israel maintains the right to 'conduct independent security activity' in Gaza.

Jericho, meanwhile, has yet to find out exactly how large its area of 'autonomy' will be. Agreements reached so far suggest that the size will be 54sq km, far less than Mr Arafat first demanded. But the de facto redeployment of recent days suggests it will actually be only about 26sq km. As in Gaza, elaborate schemes have been devised to allow nearby settlements to be fenced off and new roads are being built around Jericho, solely to serve 100-odd settlers.

For its short life-span, the Gaza-Jericho plan may muddle through. Mr Arafat's return will spur new euphoria. As the second phase comes in, however, this miniature mish-mash will be replicated throughout the West Bank. There are 140 settlements in the occupied territories. How many roads will be built to ring each one, when Palestinian autonomy gets into full swing? Will there be joint patrols on every shared road? Palestinians and Jewish settlers cannot be kept apart. They meet at a hundred road junctions, and each is a flashpoint for violence.

It is argued that once Mr Arafat is in power and a newly confident Palestinian council in place, the momentum for peace will overcome such problems. Some settlers, perhaps, will move out, easing the friction. Aid will start to flow into the Palestinian entity and the economy will start to recover. But who will invest in a Palestinian economy where security hazards are so evident? What is more, the new Palestinian authority is to be severely restricted in its powers to regulate its own economy. Israel is demanding a veto over every legislative change the newly elected Palestinian authority proposes. The Palestinians' ability to run their own affairs is untested.

The paradox of the Oslo accords is that they envisaged peace in stages in order to prove that co-existence was possible. The delay in dealing with settlements, however, is likely to prove that co-existence is out of the question.

The Oslo accords need to be radically rewritten. Discussion of the final status of the lands must take place soon. And only Mr Rabin can decide whether this should happen. Mr Arafat's credibility is already low in the occupied territories. And the more he is forced to concede, the more his authority will crumble.

Optimists believe that Mr Rabin may already be moving towards a change in approach. Israel's greatest fear is that Islamic extremists will be the ones to benefit if the Oslo accords fail. Under the nightmare scenario, Hamas benefits from the humiliations of the Oslo debacle and sets up a power centre in the West Bank and Gaza. Inside Israel proper, support for the settlers has been damaged by the Hebron massacre, and there are rumours that the settlements are now secretly on the agenda. And even that Mr Rabin is showing flexibility on discussion of Jerusalem's final status.

The evidence on the ground, however, suggests otherwise. Ever fearful of his own political opposition, Mr Rabin insists that no settlement will be uprooted during the interim phases. He has a military mind and likes to proceed cautiously from A to B. Not an inch of sovereignty has yet been ceded, and Israel continues to build settlements on a broad swathe of land around Jerusalem.

Those who observe the Israeli prime minister closely believe he has not yet decided how much land he might ultimately hand over to the Palestinians. But if the Oslo peace map is not redrawn soon, there is a risk that the final phase of talks may never be reached.

(Photograph omitted)