All Together Now

By GEORGE J. CHURCH

The P.L.O. recognizes the right of the state of Israel to exist in peace and security.

-- Letter signed in Tunis by Palestine Liberation Organization chairman Yasser Arafat

The Government of Israel has decided to recognize the P.L.O. as the representative of the Palestinian people.

-- Letter signed in Jerusalem by Israeli Prime Minister Yitzhak Rabin

Plain words, devoid of the electricity of "All men are created equal" or "Liberty, equality, fraternity" or "Workers of the world, unite!" Certainly the image of Rabin and Arafat, once implacable enemies, standing together on the White House lawn captures the drama of the moment more vividly than these words. But the Arafat-Rabin letters will echo loudly through history precisely because of their practical quality. War cries tend to strident emotionalism, while bitter enemies feeling their way toward reconciliation speak wisely in tones of caution. In this case the very flatness of the words was reassuring; Arafat and Rabin had left themselves no room for ambiguity, evasion or disavowal. The veteran antagonists had actually put on paper the idea that generations of Palestinian and Israeli leaders, themselves included, had vowed never to entertain: no longer will Israel and the P.L.O. try to destroy each other. Instead they will attempt to live side by side in peace. What had justly been called the world's most intractable problem suddenly looked solvable.

As astonishing as this step is, nothing about the future will be easy. Even making the arrangements for signing the Declaration of Principles for Palestinian self-rule in Washington this week had its delicate moments. At the request of both sides, President Bill Clinton arranged the splashy White House ceremony to give the process a boost (and, of course, to associate his Administration with an accord the U.S. had not directly helped negotiate). Clinton left it up to both sides to pick the representatives, and on Friday the Israelis planned to send Foreign Minister Shimon Peres and the Palestinians P.L.O. Executive Committee member Abu Mazin. But at 7 p.m. Friday the Palestinians told State Department officials that Arafat would head their delegation. Dennis Ross, the State Department's special coordinator for the Middle East, immediately called Warren Christopher, who was having drinks with reporters at his house in Georgetown. Christopher ducked into a side room to take the call; after the reporters left, Christopher called Clinton.

The two agreed to inform Rabin as soon as day broke in Israel. Shortly after midnight Christopher phoned Rabin, who had already heard the news from the Israeli embassy in Washington. "And so Mr. Rabin said, 'If he is coming, I have no other alternative. I'll come,' " recounted a senior Israeli government official. The official emphasized that Rabin did not feel he had any choice. "If No. 1 is coming, then another No. 1 must come," he said. "But you can be sure ((Rabin)) is not satisfied with it. He doesn't like this personality, Mr. Arafat, his past and his career. It's very difficult for everyone here to see Mr. Rabin clutch hands with Mr. Arafat. For many Israelis, even Labor Party voters, it's unbearable."

For the world at large, the mutual recognition diminishes a fearsome old threat: not long ago, the Arab-Israeli dispute was at the top of any list of conflicts that might end in nuclear war. Israelis and Palestinians can now even hope for a kind of liberation -- freedom from 45 years of mutual hatred and fear that have imprisoned two talented and energetic peoples and squandered their resources. The Palestinians and the Israelis now have the chance to show their real stuff; both have what it takes to be a capitalist success.

The Palestinians, many of whom are sophisticated and well educated, have dragged out a painful existence in the West Bank and the Gaza Strip, with many once prosperous families reduced to poverty; the two areas have a population about a third of Israel's, but their gross domestic product is only 5% as high. More humiliating still, Palestinians have been heavily dependent for such jobs and incomes as they have had on the very Israeli occupiers they have incessantly fought with stones, bricks, bombs and gunfire. Their reverence for education has been wasted in a place that offered them few if any opportunities.

Since its founding in 1948, Israel has been a garrison state, devoting its energies and capital, and aid from foreign governments and Diaspora Jews, to building and maintaining a military establishment that would crush its Arab enemies. The expense has deprived Israel of funds needed for the enjoyment of an even better life and more vibrant economy.

Israelis have never felt either secure or comfortable ruling over the Palestinians. Now they see an opportunity to be a normal nation, doing business and living well. Says Yeshayahu Leibowitz, 91, a professor of science and philosophy at Hebrew University: "Our problem in the state of Israel is not to liberate the Palestinians, but to liberate the Israelis from this accursed domination through violence." For Yael Dayan, a member of the Knesset and daughter of Moshe Dayan, the one-eyed hero of Israel's early wars against the Arabs, "The end of the conflict will mean we can be comfortable in our own skin. We can stop being worriers, missionaries, occupiers. We can be Middle Eastern, Mediterranean; we can eat watermelon and sit under our fig trees, while also producing the best computers and medical equipment in the world."

If Israeli and foreign money joins with Palestinian labor and the brains of both sides to build roads, water projects, electric and communication grids -- all contemplated in the Israeli-P.L.O. Declaration of Principles for Palestinian self-rule -- and if other Arab states join in cooperative projects to make the desert bloom, the prospects should convince anyone that peace pays better than hate. "We have the chance to see Israel become the nucleus of a very prosperous Mideast," says Dan Gillerman, chairman of the Federation of the Israeli Chambers of Commerce. The Palestinians have the chance to start building a national economy that does not have to be hidden under people's mattresses.

None of it is guaranteed to happen. Doubtless there will be many twistings and turnings, moments of tension and suspense, backsliding by either side that threatens to abort the whole process before a real peace is nailed down. But the odds seem to be that one will be achieved. Last week's breakthrough was the result less of altruism than of simple realism. Secret talks in Oslo built enough trust to impel Arafat and Rabin to take the first step: recognition.

The difficulty of that cannot be overstated. For decades, Arafat and other Arab leaders would not even utter the word Israel. When they absolutely had to name the enemy, they referred to "the Zionist entity." On the Israeli side, former Prime Minister Golda Meir denied there were any such people as Palestinians, and one of her successors, Yitzhak Shamir, implied that Palestinians are not quite human; he described them as "grasshoppers compared to us."

The principles did contain a bit of lofty rhetoric. The two sides pledged that they would "strive to live in peaceful coexistence and mutual dignity and security and achieve a just, lasting and comprehensive peace settlement and historic reconciliation." But they quickly got down to a fairly nitty- gritty discussion of procedures and timetables for Israeli military redeployment and Palestinian self-government, first in the Gaza Strip and the town of Jericho, then in the rest of the West Bank. The outcome of that test run is yet to be decided even in principle. Though both sides foresee an eventual Palestinian state in confederation with Jordan, the P.L.O. wants confederation to be freely chosen by a fully independent state; the Israelis may want to make it a precondition.

Arafat and Rabin may find it more difficult to deal with rejectionists on their own side than to deal with each other. Arafat has to win approval from two-thirds of the Palestine National Council, a sort of P.L.O. parliament-in- exile, to repeal the provisions of the organization's charter that pledge destruction of Israel. He is likely to prevail, but only after some jockeying. Then there is a threat of violence from Hamas, the Islamic fundamentalist organization that regards Arafat as a traitor for even talking to Israel. Hamas' current line is that it will not shed Palestinian blood (though other extremists have openly raised a threat to assassinate Arafat). Hamas may well conduct terrorist attacks on Jews that could bring disruptive retaliation from the new Palestinian police and Israeli army.

Rabin's Labor government is selling the agreement on the not entirely reassuring ground that it is "reversible" if the P.L.O. welshes or cannot contain extremist violence. Rabin almost surely will get the pact through the Knesset, and once it is approved, it will be difficult for any subsequent Israeli government to back out. Ariel Sharon, a leader of the opposition Likud bloc, thundered last week that if his party returns to power, it "will not honor" the pact. But no one else in Likud endorsed his view.

A signed agreement with the P.L.O. should help Israel negotiate pacts with other Arab states, giving peace a broader dimension. The excuse many Arab governments gave for hostility to Israel was that they could not betray the Palestinian cause. Now that excuse is gone, and the other Arab states must decide whether to jump on the peace bandwagon or be left behind. Jordan and Israel have already worked out the principles of an agreement that both sides want to sign as soon as possible. Without benefit of a formal treaty, the two countries cooperate on matters like sharing the waters of the Jordan River. At the last round of peace talks in June, their negotiators fell to discussing pest control in the neighboring towns of Eilat and Aqaba. Says Shimon Peres: "We were left without subjects except for mosquitoes and flies."

Syria, on the other hand, remains rather glum about the P.L.O.-Israeli deal. Although President Hafez Assad gave it distant approval, he is miffed at being made to look as if he is following Arafat in concluding an accord with Israel instead of playing the lead Arab role he prefers. He might also fear that the Israeli-P.L.O. agreement sets an uncomfortable precedent for his own negotiations to get the Golan Heights back from Israel. The Declaration of Principles foresees a gradual, step-by-step Israeli withdrawal from the Gaza Strip and West Bank. Assad seeks a total Israeli pullout from the Golan in return for something he calls "full peace" but has never spelled out. Getting Assad's agreement to a peace treaty will doubtless take arduous negotiations and a much more active U.S. mediating role, but few diplomats think he will hold out long.

Lebanon is the third of the Arab neighbors with which Israel has been at odds. Israeli military forces still occupy a self-proclaimed security zone in southern Lebanon that they seized during the 1978 invasion. Guerrillas there killed seven Israeli soldiers in early summer, touching off escalating exchanges of artillery and rocket fire and eventually Israeli air strikes; when the smoke cleared, about 300,000 Lebanese refugees had been driven northward to escape the conflict. Lebanon, however, has become a satellite of Syria in everything but name; if Israel can negotiate an agreement with Damascus, Beirut should follow quickly.

Non-neighboring Arab states, like Saudi Arabia and the Persian Gulf oil states, most of which are still officially at war with Israel, will have little incentive to remain hostile, since they can no longer be accused of betraying the Palestinians. Moderate Arab states such as Egypt and Morocco may still be targets for subversion and terrorism by Islamic fundamentalists, crying louder than ever that their governments are selling out to the Zionist enemy and its prime backer, the U.S. But those governments will be able to reply convincingly that the fundamentalists are being more Palestinian than Arafat; any deal good enough for the P.L.O. should be good enough for the rest. Fundamentalist Iran and outlaw Iraq doubtless will do everything they can to destroy the budding peace, but that could just drive them further into isolation.

To all these dazzling prospects, there is one immense if. Peace must pay economically if it is to endure -- or indeed come about at all. What has been achieved so far is not really peace but the beginning of a negotiation between adversaries who, though they finally recognize each other's existence, seize every opportunity to proclaim that they do not yet trust each other. Trust will grow only if each successive step leads to a measurably better life -- primarily for Palestinians but also for Israelis. If it does not, Hamas and other extremists will thrive on the poverty and despair. Some Israelis euphorically predict that peace will almost automatically make their economy blossom. "I see a good chance of Israel becoming the Singapore of the Middle East, a place where multinational companies will set up their technological and marketing headquarters for the region," says Gillerman. So far, these companies have not come in large numbers because almost all Arab countries boycott products from Israel. Other experts doubt that is the only reason: Israel's relatively high-tech economy is more attuned to European than to Middle Eastern markets, they say, and labor in Israel is high priced. Amos Rubin, senior director of economic-policy issues at the Bank of Israel, points out that after 14 years of peace with Egypt, Israel's exports to that country were a "paltry" $7 million last year. A joint economic committee formally established under the 1979 Israeli-Egyptian peace treaty finally was scheduled to hold its first meeting last Sunday -- an indication, perhaps, that peace and its prospective economic benefits are catching.

On one point, everyone is agreed: Israeli-Palestinian development will have to be jump-started with foreign money, some of it private investment but much of it government loans and grants. Eytan Gilboa, professor of international relations at Hebrew University, says this time Israel will be forced to avoid + simply handing the U.S. the bill: "Much more effort will be required to mobilize financial resources from the oil-rich states in the gulf and from Europe and Japan." But American officials readily acknowledge that the U.S. will have to be the principal banker, supplying American money and rounding up more from financial partners and world institutions.

The case for such help is overwhelming. Yes, the U.S. already extends generous aid to Israel: about $800 a year for each Jewish Israeli, mostly for armaments. Yes, the U.S., Europe and Japan have many other commitments and severe economic troubles of their own. But of all areas of the world, the Middle East is the one where aid could make the biggest difference. Populations are small: 5 million Israelis; 1.8 million Palestinians in the West Bank and Gaza Strip. Economies are on a similarly modest scale. Sums that would vanish without effect in Russia could make an enormous difference here. What matters most is not whether foreign economic aid to the Middle East produces the biggest bang for the buck, but whether it brings the most peace for the penny.

With reporting by Lisa Beyer/Jerusalem, Dean Fischer/Tunis and J.F.O. McAllister/Washington