Introduction Palestinian people are directly involved in an unfolding of social and geo-political events which are transforming their society from being a diaspora and intifada based society (unwritten laws acknowledged and arranged by popular movement) to a civil society in the making with a leadership which is a recognised partner in a political settlement. The Declaration of Principles (D.O.P.) signed in September, 1993, upon which this settlement is based, could lead to either Palestinian independence or to another Palestinian disaster. In order to understand the direction in which Palestinian society is heading, it is important to characterise the phases through which Palestinian society moved from 1967 until the present and to examine the development of strategies, the evolution of the leadership -the economic and political elites, and the fluctuations of the internal and external relationships.

I. Historical Background Over the past four decades Palestinian society has been through several phases of resistance under occupation all of which have contributed to its changing nature. This period has determined the status of its regional and international relations and had a major effect on the way in which the society is perceived by the world at large. These phases of resistance can be characterised in the following terms:

a) Non cooperation This first phase of Palestinian reaction to the Israeli military occupation of the West Bank, Gaza Strip and East Jerusalem between 1967 and 1970, was exemplified by a strategy of "non cooperation". This was based on the shock of defeat, fear of the unknown and affected by the fact that the leadership at that time were traditional local "notables" without authority who had an unsteady relationship with the newly established PLO (1965) and with Jordan. Palestinians, both inside and outside, put all their hopes on the 1967 Arab summit in Khartoum which addressed the necessity for "the elimination of all traces of aggression" with no recognition, negotiation or settlement with Israel, and on UN Security Council resolution 242 of 1967 which was hoped would provide the solution to the 1967 problem - the occupied Arab Territories.

This strategy of non cooperation led to the crippling of Palestinian society as schools, universities and courts were closed, contracting and services collapsed and there were continuous general strikes among professionals and the business network. The hope was that the occupation would be short (as in Gaza, 1955-56) and that the call for "rectifying" the Jordanian-Palestinian relationship would be heard.

b) Steadfastness The second phase of Palestinian resistance to Israeli occupation was between 1970 and 1982 and took two different tracks. On the local level it was the strategy of sumud or steadfastness. This meant a maintenance of the status quo while doggedly waiting for a solution to come from outside, either internationally (the superpowers or the UN), or regionally (the Arab states or the PLO). The second track was Palestinian resistance which saw military confrontation with Israelis in the Jordan valley in 1968/9, a military struggle for power in Jordan during the 70s and the establishment of a strong base in Lebanon in the late 70s. The evolution of the local leadership during this period was characterised by the demise of local notables with close ties to Amman, the rise of a national front (orchestrated mostly by adherents of leftist ideology), the formation of the National Guidance Committee (which combined all nationalist groups) and finally the rise of the PLO factions with the Fatah movement being the most dominant.

c) Isolation During phase three, between 1982 and 1978, the Palestinian military resistance movement made its exodus from Lebanon. After almost ten years of military confrontation with Israel the whole structure of the Palestinian mini-state in Lebanon was destroyed and anything that could be salvaged from its institutions there was transferred to Tunis.

Meanwhile, inside the OPT, were three external elements, each with very different interpretations and each of whom worked intensively to shape and implement an "autonomy plan".

The first of these was the United States, and bearing in mind the background of Camp David, people in the US state department promoted the theme of "improving the quality of life".

The second element was Jordan and it's interest was in promoting a controlled regional development plan for the West Bank, with the intention of replacing the local PLO leadership with those who had control over the local economy and a strong business network.

The autonomy plans of the third element, Israel, in this phase, were based on the "Jordanian option" ie. that Palestinians in the OPT were Jordanian citizens with their government in Amman. Throughout these three phases, Israel had total control over the land (land confiscation, settlement construction, control over natural resources, particularly water); the people (denial of human rights and discrimination amounting to an apartheid type policy); and the authority to govern without any respect for international law, appeals by the West or Palestinian cries for freedom. According to Israeli scholar, Meron Benvenisti the message Israeli wanted to convey was that "occupation is irreversible".

Throughout this period there was considerable confusion among Palestinians as to what their priorities actually were which was not helped by the competition between the inside and outside leadership and among their organisations and institutions.

d) Intifada In phase four, between 1987 and 1990, Palestinians initiated a new chapter of their resistance under the banners of the intifada. This meant to change the status quo (ending Israeli occupation) and to build a new society (freedom and independence) on national soil without waiting for a solution to come from outside. The intifada succeeded in:

a) Palestinising and promoting national unity of the society; b) starkly reminding the world of the Palestinian cause and gaining a renewed recognition and sympathy; c) demonstrating that the green line was a definitive border line, which the Israelis were reluctant to cross into the OPT and Palestinians were not allowed to cross into Israel. "Palestinian stones kept Israelis away from the OPT and Palestinian knives kept Palestinians away from Israel".

In terms of leadership, the well organised factions formed the United Leadership of the Uprising (UNLU) in the first year of the intifada and actually governed the OPT, continuously confronting the Israelis and maintaining strong connections with the PLO headquarters in Tunis. This period witnessed a revolutionary change in the traditional fabric of the society affecting the functioning of the economy, education and health services, family structure and the role of women who became active in the initiatives to bring about social change.

e) Negotiations Phase five, 1990 to 1993, witnessed the Gulf crisis, a divided Arab world, a PLO in a state of siege in Tunis, the fall of the Soviet Union and Eastern European bloc, and an American agenda promoting a "Land for Peace" formula, Resolutions 242 and 338 and negotiation in a peace process starting with Madrid. The theme of this phase was "negotiation, recognition and reconciliation". The Palestinian leadership in a divided Arab house, accepted the challenges and went under a joint umbrella with Jordan to Madrid in October 1991 and then to subsequent negotiations in separate teams to Washington. There was no change in Israeli policies and practices vis-a-vis the land and its people and the intention was to bring the Palestinians to agree to the old autonomy plan. The Palestinians, after 22 months of negotiations, delivered the Palestinian Interim Self Governing Authority (PISGA) plan. The PLO in Tunis opened five different additional channels of negotiation, one of which led to the Oslo agreement and the signing of the D.O.P. in Washington on 13th September 1993.

II. From Oslo-Washington to Gaza-Jericho: The current phase and Palestinian interpretations.

a) The Mainstream and its alliance The mainstream believe that the D.O.P and the implementation of the "Gaza-Jericho-First" agreement will lead to an independent Palestinian state. It is hoped that the return of Yasser Arafat to Gaza and Jericho will close the gap between inside and outside and unite the Palestinian political agenda which is concerned predominantly with: 1) releasing the detainees, return of deportees and diaspora; 2) dismantlement of Israeli settlements in the autonomous areas; 3) development projects and investment with the joint effort and involvement of Palestinians inside and outside; 4) democratisation, starting with national dialogue and working towards elections. The Fatah movement started a process of institutionalisation in preparation for elections to a congress, a central committee and a collective leadership within the movement; 5) establishing a national democratic political system on Palestinian soil, liberalisation of major institutions;

This mainstream is faced with the challenges of:

1) Israeli settlement and settlers within the autonomous areas and no political mechanism or power to confront their presence, insist on their removal or even to freeze Israeli plans to expand and strengthen settlements in the OPT. 2) No power or influence to link the transitional phase with the issues of the final arrangement. Bilateral talks appear to be overshadowing multilateral talks raising fears among Palestinians that their position, interests and needs on the questions of Jerusalem, refugees, security and borders will be severely undermined prior to the final arrangement. 3) Being drawn into a sea of local, daily issues with no division of labour among members of the PNA and the beginning of a power struggle among them which is weakening their credibility, their future legitimacy and could result in the limitation of their future authority to Gaza only. 4) Close and continuous coordination with Egypt at the expense of any coordination with Jordan which has been clearly and generally negatively noted by many different and concerned parties. 5) The confusion and overlap of economic plans and agreements within the society itself and between the PNA and Israel and the PNA and Jordan.

The PLO remains the recognised leadership for Palestinians everywhere but its infrastructure and institutions are involved in a major process of being reshaped. This Palestinian authority in the making is going through a trial and error period as it adapts to its new circumstances and attempts to establish its legitimacy on the ground which will lead to its ability to provide effective government.

b) The opposition The secular and religious opposition interpret the 1993, D.O.P as the "Disaster of Palestine" and "Gaza-Jericho First" as "Gaza-Jericho, First and Last", expecting the PNA to become no more than "collaborators" with limited authority over these two regions. They base their argument on the following assumptions: - UN and Security Council resolutions are becoming no more than archive documents; the world is accepting the idea that the Middle East crisis is over; Europe and the US consider the people of the Middle East to be negotiating and reshaping their own relations in the region and the role of the international community is to offer financial support only and not interfere in the deliberations and; a divided Arab world is burying the Arab nationalist cause, focussing on economic and market issues with each state defining its own separate agenda which reflects its own interests and relationships.

The secular opposition state that there is no detailed and comprehensive Palestinian strategy which can unite the people, but that it is all based on words and slogans. Concerning Jerusalem particularly examples like "Palestinian flags will be flown from the walls of Jerusalem" or "We shall all pray together in Jerusalem" are criticised as no more than hollow rhetoric. They point out the reality that Jerusalem is isolated and in a state of political and security siege. There is no movement anywhere in the OPT without Israeli permission or an Israeli granted license and Israeli military forces are still present. Therefore, they claim that the PNA will be "collaborators" with limited authority for the duration of the transitional phase.

The religious opposition state that military operations (by Hamas) against Israel are to keep up the pressure for the dismantlement of settlements. They say that their opposition platform is a responsible opposition and it is not in their interests for security to collapse or for a Palestinian civil war to arise and that they are in dialogue with the PNA. They say that a reform of their military actions in accordance with the transitional phase is needed and add that military action on the part of Hamas has actually been military "reaction" against a massacre or an Israeli attack. They say, for example, that the Rafah operation was a reaction to the massacre at the Erez checkpoint. The Afula and Hadera bombings were reactions to the Hebron massacre and that Gush Katif was a reaction to the killing of a Palestinian youth in Jerusalem.

They consider these operations a part of their effort to meet people's aspirations and demands for justice and to gain further support. Regarding the reformation of their military operations, they say that they will no longer announce who is conducting these operations, no longer claim responsibility for them and no longer make public the reasons behind them.

The opposition, however, both secular and religious, does have a crisis. They continuously criticise the D.O.P. and the Palestinian Authority in the making, its practices and its political agenda without offering a convincing and realistic alternative Palestinian national agenda. This tactic brings neither hope nor change to the current situation and could arguably lessen their popularity in a social climate where people are weary of negativism.

The opposition is also in danger of falling into the same trap of words and slogans without making any practical effort to mobilise the community or coordinate with other factions in challenging the occupiers as was done in the intifada phase.

It is also very likely that the opposition will accept to join the game of "musical chairs" starting with the first notes struck by election. At the end of the day, their ultimate fear is of losing the position they do have and they cannot be sure that their "seats" are guaranteed if they are not in the game.

c) Those "rejoicing in hope". The group "rejoicing in hope" are comprised of grass-roots organisations, professionals, business people, intellectuals, and the silent majority. They think that "Gaza-Jericho" will not fail, military occupation will not return to Gaza and the current process, with or without the current members of the PNA, will lead to a Palestinian entity more advanced than autonomy but less than an independent state. They base their argument on the fact that the D.O.P. was signed at the White House which was a indication of wide international recognition and support for its implementation. They add that Israel is entering a new era of normalisation in the region and without a continuously developing process on the Palestinian track, Israel cannot reach the rest of the Arab world. The new era of international and regional relations is based on economic and security considerations and the D.O.P. is one of the cornerstones on which businessmen, investors and governmental projects are to build the new Middle East. Any areas of future conflict such as finance and banking, labour and market issues or access to water and natural resources, can only be resolved by negotiation and not on a military basis.

This group is continually praying for the Palestinians to grasp the opportunities in the coming two years to rebuild their homeland with less conflict and more coordination with all internal and external parties. They see Arafat and Rabin as being in the same boat with the decision on whether this boat will sail or sink in the hands of the two peoples. This group believe that neither Palestinians or Israelis are interested in seeing the negotiation boat sink and that new definitions must be found for the relationship as they begin to use a joint vocabulary which can create new words and develop a common language for both of them. In particular they consider that the word "sovereignty" could mean "sharing authority" and the words "open city" could mean rotating responsibilities.

III. The three main external parties. There are three major players who are influencing, either directly or indirectly, the shape and direction of the current Palestinian scenario: Jordan, Israel and the donor countries.

a) Jordan There have been major developments in the Amman interpretation of the "Jordanian option" from:

a) wanting to return to the status quo ante, ie. re-governing the West Bank as a part of a new united Arab kingdom under the Hashemite dynasty and keeping the Palestinians as citizens of the new Jordan, to: b) a joint functional arrangement in which both Jordan and Israel focussed on improving the "quality of life" in the OPT through controlled development plans designed to integrate Palestinians into a confederation with Jordan, to: c) disengagement - implementing final disengagement in July 1988, as a result of the intifada (Jordan realised that the resolution of the Rabat summit regarding PLO "sole" representation of the Palestinians, which it reluctantly accepted in 1974, could no longer be questioned) and leaving Palestinians to determine the nature of their future relations with Jordan, to: d) a joint Palestinian/Jordanian delegation under one political umbrella for negotiations starting with the Madrid peace conference but with no serious coordination or sincere openness, to: e) a gap of mistrust and conflict of interest with both Palestinians and Jordanians aiming for separate and independent economic and political agendas, to: g) the Washington Declaration in 1994, which was the other side of the 1993, D.O.P. political understanding and partly a result of Israel leading the classic political game of "divide and rule" which also fragmented the Jerusalem question.

Under the far-sighted vision of King Hussein in dealing with the PLO, and after the signing of the Washington Declaration in which Israel officially recognised the legitimate sovereign state of Jordan for the first time, Jordan is looking for a phase of "coordination" with Palestinian and Israeli personalities and institutions. Amman is not interested in competing with the PLO authority in the OPT nor provoking Israeli security concerns on the borders. It has further realised that it cannot continue to play the role of a political, economical and demographic centre for Palestinians as in the old days. Since the D.O.P and its partial implementation on the ground, Jordan fears that the donors investment and economical development on the other side of the river will shift the demographic and political balance, creating a new centre and leaving Amman no choice but to become an extension of the "new Palestine".

b) Israel The Israeli plans for changing the image of occupation can be understood as offering Palestinians autonomy by applying the "carrot and stick" policy (under Labor Party rule 1967-77 or as in the Camp David Accords under Likud from 78-85) or by a policy of "improving the quality of life" under a coalition government and then applying the "iron fist policy" with Rabin as Minister of Defence in 1986. These stages of development can basically be defined as follows:

a) Autonomy for the people and not for the land. b) Autonomy for the people on part of their homeland. c) Limited autonomy in Gaza and Jericho with the redeployment rather than withdrawal of military occupation. d) Limited self rule and replacement of military occupation by "economic occupation" which could sink the PLO in the Gazan sea and open the door in Jericho for Jordan to re-establish its relationship with the West Bank.

A brief examination of Israeli policies illustrates the following:

- creation of political and physical isolation of Jerusalem justified by the claim of security considerations, a position which will strengthen the Labor party in the election campaign of 1996; - reluctance to deal decisively with the future of settlers and settlements in the Occupied Territories, especially after the Hebron massacre which reflects the split within the Israeli decision making body; - postponement of the refugee question to encourage their assimilation into the Arab world - a position which has remained unchanged in Israeli policy since 1948; - continuous and full control over borders and security to keep "military Israel" the regional police of the future; - freedom to pursue other bi-lateral tracks (on the Jordanian and Syrian front) at the possible expense of the Palestinian agenda which will implement "normalisation" with Arab countries without actually ending the occupation in the OPT. An indication of this is the recent announcement by Gulf countries to end the boycott policy against foreign companies dealing with Israel. Morocco and Tunisia are to open representative offices in the OPT as part of the normalisation process with Israel;

- control and regulation of budgets and projects supported by the donor countries to enforce the Israeli interpretation of the D.O.P. on the future direction of the OPT and the PNA.

c) The donor countries Seeing as the D.O.P. might lead to stability and security in the region, major countries have shown interest in and commitment to supporting the new Palestinian agenda and their authority in the making. However, their reservations and reluctance to meet the needs and demands of Palestinian development projects and budgets are caused by what they claim the lack of the following:

a) Transparency: the necessary modern structure to assure accountability of support received, ie. third party auditing, professionalism of bodies responsible for project implementation. b) A centralised body which is governmental in nature and part of the Palestinian authority, ie. The Palestinian Economic Council for Development and Reconstruction (PECDAR), through which support could be channeled and made accountable to one source. c) Political conditions which satisfy the policies of Tel Aviv and Washington and which can monitor the size, shape and outcome of all projects and the spending of their budgets.

IV. Issues facing the Palestinian National Authority.

One question repeatedly raised is whether or not the PNA can deal with the complex nature of Palestinian civil society which has always operated amid a plurality of political opinions. There are several immediate issues which it is necessary for the PNA to take a firm and acceptable stand on to demonstrate its capability and to maintain its support. One of the primary issues is the question of Jerusalem, regarding which the PNA need to rapidly establish a strong national consensus on their position. In order to do this, they need to continue stressing that Jerusalem is the capital of the Palestinian people and an inseparable part of the OPT. It must be included in all developments in the transitional phase and should begin with Israel freezing, if not reversing, the continued Judaisation of the city and rectifying the damage already done.

Another problem concerns PNA ability and qualification to govern and obtain the necessary funding for "early empowerment" in the spheres of education, health, tourism, social welfare and taxation. Recent reports on funding, however, announced that donor country funds to the PNA would be channelled through the United Nations Relief and Works Agency (UNRWA) to cover police salaries and related costs from July 1994 through to the end of October 1994 only. The United Nations Development Programme (UNDP) has indicated that it will "bridge the funding gap" until the PNA tax system has developed to the point of covering salaries and recurrent policing costs. At present, the cost of police salaries is about $7million per month while the tax revenue collected by the PNA is running at $3million only.

There are currently 7,200 Palestinian police in Gaza and Jericho as well as three intelligence agencies - the Preventive Security Force, the Presidential Force and the General Intelligence security apparatus. There have been doubts raised about the PNA's interest in uniting and centralising the various security organisations to become one national apparatus and doubts also about the fairness and integrity with which they will be able to maintain law and order in all of the OPT.

Other issues which the PNA must prove competent in dealing with include human rights, liberties and press freedom, formation of political parties, freedom of enterprise and investment and non-interference in the running of independent institutions.

The PNA must also face the problems associated with democracy building and running their own affairs through the mechanism of elections. This particular issue is crucial in order to legitimise the current leadership and open the door for the upcoming generation to share the responsibility of building the homeland. Further more it will demonstrate respect for the agendas of the religious and secular opposition and maintain national dialogue and harmony with them. It is also the most speedy and effective manner of divorcing Israel.

VI. Possible scenarios.

a) Israel to become a citizen of the Middle East rather than a child of Europe and dependent on continued US support. This would involve sharing of responsibilities for regional economic cooperation and security arrangements, on an equal footing with other Middle Eastern countries starting with the Palestinians. b) Jordanian-Palestinian confederation based on equality and mutual respect. c) Syrian-Lebanese confederation which will open the door for creative Lebanese enterprise in shaping the touristic nature of the new region. d) Failure of the DOP which may lead to the rise of the two oppositions - Likud and the Jewish extremist groups in Israel, and the national and religious radicals in Palestine, Jordan and Syria - which may start a new chapter of painful confrontation.