Read his lips. He's nervous: The mask of confidence worn by PLO leader Yasser Arafat is slipping, argues Robert Fisk

TWO DAYS after his first return to Gaza, Yasser Arafat was walking down the staircase of the Palestine Hotel in Gaza City when he saw a group of Israeli journalists waiting for him on the first floor. 'It's a trap,' he hissed to his astonished economics adviser. 'They have come to ask me bad questions.'

The PLO official gently told his chairman that as 'President' of Palestine, he must talk to the Israelis. 'But they will want to take a photograph of me with them that will be used by our enemies here,' Arafat muttered. 'They will ask questions about our problems to embarrass me.'

Grudgingly, Arafat agreed to say a few words, but the episode revealed the suspicion and fear the PLO leader has tried to conceal from his supporters. Even to them, the mask of confidence has occasionally slipped. Addressing Palestinians in the Jabaliya refugee camp, he admitted for the first time that the PLO-Israeli declaration of principles - for which he had thanked President Clinton three times in front of the world's TV cameras - was, after all, not quite what it was cracked up to be.

'Let's talk frankly,' he said in a passage that went largely unreported. 'The agreement we have made is not to our taste. But it is the best we have when we are facing the worst Arab predicament.'

Despite the hoopla and the reports of a 'triumphal' homecoming, therefore, Arafat was back doing what he knows best: making the best of a very bad job - in this case, a deeply-flawed agreement that has left almost 2 million Palestinians rotting in the refugee camps of Lebanon, Syria and Jordan, and, in the eyes of his critics, has legitimised Israel's occupation over the rest of the West Bank.

Despite the Jewish settlements built across the West Bank, Arafat accepted without demur the suggestion of Warren Christopher, the US Secretary of State, that Israeli-occupied territories should henceforth be referred to as 'disputed' - as if the Israelis might have some valid territorial claim to these Palestinian lands - preferring instead to boast to his colleagues of the postage stamps and passports that Palestinians might soon be able to purchase.

Arafat pleaded his poverty to the world, claiming that the Americans had given him only dollars 5m to pay his 9,000-strong police force, neglecting to mention that the Israeli economy, so heavily underwritten by the United States, is subsidising the Israeli army's redeployment within Gaza to the tune of dollars 148m, a figure issued by the Israeli army itself.

Arafat's award of a Unesco peace prize contained ironies that were not lost on his critics. He accepted the prize from Henry Kissinger, who did more than almost any other politician to isolate the PLO's voice in the Seventies; and it was an award paid for from funds donated by the late Felix Houphouet-Boigny, who once admitted to salting away 'billions' in Swiss banks and squandered the Ivory Coast's money on a Catholic basilica larger than St Peter's.

There will be no such architectural monstrosities in Arafat's Palestinian boroughs, but the smell of political corruption has been noticed. Haidar Abdel-Shafi, the incorruptible Palestinian nationalist who led the original delegation to the Washington peace talks but who refused to accept a seat on Arafat's 'National Authority', says that democratic rule cannot be guaranteed in Arafat's new fiefdoms. The selection of members of the self-rule authority and of Palestinian police officers, he says, 'depended mainly on political and personal loyalties rather than on efficiency'.

And within a week of Arafat's arrival in Gaza, a phenomenon long familiar to those who endured the PLO's militia rule in Lebanon appeared in the city. Farid Jabu, a 28-year-old taxi driver accused of 'collaboration' with Israel, died - officially of a mysterious 'heart attack' - in PLO custody in Gaza City; but his family said that when his body was returned to them, it bore the marks of severe beatings. How soon, Arafat's opponents are asking, before members of the Democratic Front or the Popular Front or Hamas or Islamic Jihad end up dead in the PLO's police stations?

Arafat talks about democracy and free debate; but one of his first public steps was to open a Palestinian radio station on 702 metres - the same wavelength used by his Palestinian opponents to transmit their 'Voice of Palestine' broadcasts from Damascus. Thus the president who complains about the 'Arab predicament' began by jamming the words of his Palestinian antagonists.

Shocked by the stench and decay in Gaza City - a frightening contrast to the clean boulevards and smart apartments of his former Tunis home - Arafat is now hearing disturbing rumours that the Israeli army would prefer someone less bombastic, more intelligent, than the present PLO chairman to run the 'self-rule' areas. For instance, General Danny Rothschild, head of Israeli military administration in the West Bank and Gaza Strip, has been telling colleagues that some Palestinian officials who work for Arafat are much brighter than their leader, more efficient, easier to get along with. At best, this means the Israelis acknowledge that at least some PLO officials can run an administration. At worst, it means that Arafat - having signed, sealed and delivered his side of the bargain - is now disposable.

Perhaps Arafat may be forgiven for thinking that the initial smack of firm government will impress his own fractured population. But while his 'mukhabarat' intelligence men cruise the streets of Gaza, it is the Israelis who are proposing new rules. In the Israeli press, government officials have suggested Arafat may achieve a quicker Israeli military 'redeployment' in the rest of the West Bank if he chooses not to argue about the civilian powers of the elected Palestinian Council. The elections themselves might be shelved, these same officials are indicating, while Hebron - the most curfewed city in the West Bank - might remain under permanent Israeli military control. 'There would be different rules for Hebron,' one Israeli official said.

Perhaps Arafat was right to sense a political ambush when he walked down the hotel staircase, but it was not the journalists who represented the trap. Locked into what he now accepts was a bad agreement, he has to live with the consequences. To maintain Israeli goodwill, he will have to make further concessions to Israel - which will help to destroy his own power. To lose Israeli goodwill will postpone any further Israeli redeployment - let alone withdrawal - indefinitely. In either case, Israelis as well as Palestinians will bleed if the intifada resumes. And as the days go by, Arafat, rather than a revolutionary hero building a nation, is likely to emerge as a profoundly tragic figure.

(Photograph omitted)