The danger is that both sides are badly misreading the situation and each other. Palestinian leader Yasser Arafat has taken an ambiguous stance toward the fighting since it erupted last September. He seems to think that this new intifada will improve his bargaining position with the Israelis as well as his own standing at home. But Sharon doesn't look like he's in any mood to be generous. Instead, Arafat may be opening the way for his people to suffer increasing deaths and casualties and a rapidly declining living standard, with any political gains far from certain.
The Israelis, too, are taking a big gamble. Sharon seems to think that if he makes things hot enough for Arafat and the Palestinians, they will cry uncle. He could be right. Palestinian intellectuals and the middle classes are skeptical about what the latest uprising can accomplish and dismayed by the damage it's causing their children and society.
IN A CORNER. But it's more likely that the stepped-up Israeli military actions will stiffen resistance among the have-nots in Palestinian society who are doing most of the fighting. Each death leads to demands for revenge and new actions against Israelis. It's also difficult to see how Arafat can demand an end to the intifada without paying a huge price in personal popularity. His constituents expect him to parlay their losses into Israeli concessions. If he throws in the towel without achieving something, his standing will slide.
It's easily forgotten that less than a year ago, Arafat's prestige was at an ebb. Back then, the preliminary peace deal that he had signed with the Israelis in 1993 was seen as disappointing. No lost territories had been regained. The Palestinians' economic plight had deteriorated, thanks in part to Israeli blockades of their territory. Worse, some of Arafat's closest associates were viewed as corrupt and too willing to cooperate with the Israelis on a range of deals, from lucrative imports of cement and gasoline to setting up a casino in Jericho in the West Bank to cater to Israeli high rollers.
Arafat's resisting of President Bill Clinton's arm-twisting at Camp David last summer and his support for the intifada has restored some of his legitimacy. But others also have gained from the intifada, notably Marwan Barghouti, the 43-year-old leader of an armed group called the tanzim. The chaos of the intifada has allowed such groups to gain visibility through patrolling neighborhoods and engaging in firefights with Israeli troops and settlers.
Barghouti is loosely loyal to Arafat, but he's preparing to play a role in the post-Arafat era -- whenever that comes. If his influence increases, it will be at the expense of such Arafat aides as Nabil Shaath, Saeb Erakat, and Ahmed Qurei, who have had extensive dealings with the U.S. and Israel.
In many Palestinians' eyes, Barghouti has more credibility than the people in Arafat's entourage. Unlike many of them, he's a native of the West Bank. He has spent time in Israeli prisons. And he's considered above-board and effective, whereas Arafat's Palestinian Authority has a reputation for corruption and ineptitude.
HAWKS RISING. Barghouti and other grassroots leaders in the Occupied Territories are pushing for a much tougher stance than Arafat has taken against the Israelis. Barghouti, for instance, told BusinessWeek recently that he would insist on an international observer force to monitor any agreement, saying the Israelis cannot be trusted to keep bargains. He also vowed to resist any unsatisfactory deal that the leadership struck with the Israelis.
Recent Israeli tactics raise the question of whether Sharon and the military are giving enough thought to the Palestinian community's changing dynamics. Their attacks on such symbols of the Palestinian National Authority as police posts and military installations seem designed to weaken and humiliate Arafat. But would they prefer to deal with Barghouti and other paramilitary leaders instead of the veteran leader? That seems unlikely. Better that Sharon and Barghouti recognize that, even in the Middle East, time marches on. Reed covers the Middle East for BusinessWeek