An Arafat Administration?

By CHRISTOPHER JOHN FARLEY

PUBLICLY, ISRAELI PRIME MINISTER YITZHAK RABIN HAS REjected a proposal, backed by a faction within his Cabinet, that Israel withdraw from the Gaza Strip before reaching an agreement with the Palestinians on arrangements for the West Bank. But a Palestinian leader has told TIME the plan is being discussed in secret talks between the Israelis and the Palestine Liberation Organization. Such an agreement may run into a snag named YASSER ARAFAT. The P.L.O. chief favors the deal only if he gets to head the Palestinian administration that would replace Israeli authorities in the Strip.