CAN PEACE SURVIVE?

By LISA BEYER JERUSALEM

This time Israeli television watchers needed no explanation of what the bearded men were doing with paint scrapers and plastic bags at Beit Lid junction in central Israel. They were representatives of the rabbinate, scouring the decimated bus stop for bits of human flesh blasted apart last week by Palestinian suicide bombers. Under Jewish law, the entire body must be given a proper burial. Viewers had seen the same ghastly task performed when another kamikaze bomber eviscerated a Tel Aviv bus, killing 22, only three months earlier.

Such scenes have been filling the airwaves like instant replay: four times in the past year, Palestinian militants have slipped into Israel and set off bombs killing a total of 60 and injuring 194. But Israel's agony is palpably greater over this latest atrocity. These victims were so young: all but one of the 21 dead Israelis were between the ages of 18 and 24. And all except one were soldiers, mainly members of the vanguard paratroopers unit. That may have made the attack seem like a legitimate act of guerrilla warfare to Palestinians. But the act of terror was especially shocking to Israelis: these fallen were the very men and women who were supposed to safeguard the rest of the nation from such assaults.

More than anything, though, Israelis responded out of a sense that they had simply had enough. As Eli Landau, the mayor of Herzliya who had lent support to Israel's rapprochement with the Palestinians, said, ``If the peace process is paved on the bodies of dead Jews, then I take it back.''

When he took the brave step of entering into a self-rule agreement with Yasser Arafat and the Palestine Liberation Organization 16 months ago, Prime Minister Yitzhak Rabin promised his countrymen peace with security. Ever since, Israelis have enjoyed little peace and less security. Rabin's political stock has plummeted, and many citizens question whether the experiment in peacemaking should go on. The negotiations are stalemated by growing ill will and Palestinian anger over Israel's continued building of West Bank settlements. As the terrorists take the psychological initiative, the maneuvering room for both Rabin and Arafat is fast running out.

The continued killing of Israelis inside the pre-1967 borders is especially damaging. No less a figure than President Ezer Weizman called for a halt in the implementation of the peace accords. It was a stunning pronouncement coming from so dovish a leader. Though several members of Rabin's Cabinet quietly backed the suggestion, the Prime Minister ignored it and insisted that the process of establishing Palestinian self-rule would go on. But his aides are skittish about the prospects for progress. Said Uri Savir, director-general of the Foreign Ministry: ``We need a profound change of direction to make the next stage a success.''

Israeli disenchantment is only half the problem. The peace process has been heading for the rocks over the steady expansion of Jewish settlements in the West Bank, already home to 120,000 people. Though Rabin's Labor-led coalition pledged to ``freeze'' settlements upon taking office in 1992, the government actually plans to complete 30,000 additional housing units, prompting widespread Arab demonstrations and threats by Palestinian officials to quit the peace talks. Two weeks ago, the Israelis promised Arafat what Environment Minister Yossi Sarid called ``a very deep freeze, one with no nonsense.'' But after the Beit Lid massacre, the government approved the construction and sale of 4,000 units in occupied land around Jerusalem. Says Mohammed Subieh, the Cairo-based general secretary of the P.L.O.'s parliament-like Palestine National Council: ``Rabin has put us in a bad position. He is not helping himself or us.''

The process so far has not delivered amity. Since Rabin and Arafat signed the first accord in September 1993, 112 Israelis have been killed by Palestinian radicals bent on wrecking the settlement. In the same period, 195 Palestinians have died at the hands of Israelis. Many of them too were innocent civilians, such as 14-year-old Mohamed Abed Ghani, who died last week in the West Bank city of Nablus when Israeli soldiers fired into a crowd of students who were jeering at them.

Worse than the blood-soaked statistics is the growing fear on both sides that nothing will improve. Palestinians and their Arab allies are increasingly persuaded that Israel has no intention of expanding self-rule in the Gaza Strip and Jericho to the rest of the West Bank. Planned Palestinian elections are six months overdue, and Israel has yet to move any of its occupying troops out of the territory. After Beit Lid, Arafat also blamed Palestinian militants for the delays. Said he: ``Every time we get nearer to retrieving in our hands the West Bank and extending the national authority, a new problem surfaces.''

For his part, Rabin pleaded with Israelis in a televised address not to give in to ``moments of weakness.'' But a poll in the daily Ma'ariv showed that while 37% of Israeli Jews are willing to proceed with the peace process, 50% want to suspend it--the highest negative ratings so far. The Prime Minister could not accede to their wish. ``We are heavily invested in this process,'' explained government spokesman Uri Dromi.

About all Rabin could offer is more security measures. As he has done after every attack, he temporarily shut Israel's borders to Palestinian workers, barring 40,000 of them from crossing daily from the West Bank and Gaza Strip--a form of collective punishment that serves only to inflame Palestinian anger. More than a hundred alleged militants were rounded up in the West Bank. Security forces were allowed to continue the tough interrogation tactics introduced after the Tel Aviv bus bombing. Since then the Israelis have arrested 1,500 Palestinians and claim that information extracted from the detainees has enabled the government to forestall three suicide attacks, one car bombing and the kidnapping of an Israeli soldier.

Israel also redoubled pressure on Arafat to crack down on Islamic militants operating out of the semi-autonomous Gaza Strip. To date, the P.L.O. chairman has treated the Islamists gingerly for fear of igniting a Palestinian civil war. Israeli officials expressed hope that now he would get tough. Palestinian security forces have rounded up 20 alleged Islamic Jihad activists. Nabil Shaath, Arafat's planning minister, swore, ``This time, it will not be a show [detention] for two or three days.''

Washington has been urging Arafat to condemn the terrorism, impress upon his own people how much these actions hurt their cause, and take vigorous steps against the perpetrators. Officials think he is making progress, though not fast or firmly enough. President Clinton froze the U.S. assets of 12 Middle East extremist groups, including the Islamic Jihad group that claimed responsibility for Beit Lid, and its larger cousin, the Gaza-based Hamas. Washington had no illusion that this would matter much; the work of the militants does not cost a lot, and Iran, their chief bankroller, is happy to make up the shortfall. Still, the move was important symbolically to Rabin and Arafat alike.

Now Israeli government officials are taking up the political refrain of ``separation.'' For months Rabin has pushed the idea that Israel and the Palestinians should live side by side but isolated from each other, and now he is trying to devise a way to do it. Some Cabinet members spoke of erecting a physical fence to keep Palestinians out of the country. It is an unwieldy and simplistic idea: any effort to decide on the positioning of such a structure would inevitably be seen as an attempt to determine the final border between Israel and the Palestinian entity that is supposed to emerge by 1999.

Until there is a final settlement, Rabin's separation concept is decidedly one-sided. Though Israeli employers are loath to do without cheap Arab labor, the government wants to keep Palestinians out of Israel. Yet it wants to maintain Israeli settlers and--to protect them--Israeli soldiers in the West Bank and even in the Gaza Strip. That is unacceptable to Palestinian negotiators. Closing off Israel to Arab workers also deprives the Palestinians of $1 million in daily earnings. If international aid would stimulate the Palestinian economy enough to replace jobs lost in Israel, the principle of separation would become attractive to the Palestinians. But only if it is symmetrical. Says Mohamed Natshe, a junk dealer in Hebron: ``Rabin doesn't want to see my face, but I don't want to see his either, nor the faces of the settlers and soldiers.'' Under the 1993 agreement, Israeli settlements are to remain in place during the interim phase, with their ultimate fate determined by the final-status accord. In the next stage, Israel is supposed to move its soldiers out of Arab-populated areas of the West Bank to allow Arafat's administration to take charge. But the Israelis say that with Arab violence unabated, the army must remain in many of those areas in order to ensure the safety of the settlers nearby. Arafat will be hard pressed to sell such a dilution of the peace accord to his constituents. Says Palestinian Information Minister Yasser Abed Rabbo: ``This is an attempt to draw a map of Palestinian cantons and ghettos.''

The most obvious way out of the conundrum is to skip over the contradictions of the interim phase and move directly to negotiations on a final settlement, which are supposed to begin in little more than a year. That idea is under consideration by Rabin's government. Israel would seek to inflate its borders to include many of the settlements and would probably offer the Palestinians full statehood in the remnants. Sa'eb Erakat, Arafat's minister of local government, says the Palestinians are ready to move straight to a final resolution. The P.L.O. will insist on nothing less than the Gaza Strip and the entire West Bank, including East Jerusalem, which it hopes to make the Palestinian capital.

Establishing final borders and resolving the question of Jerusalem, which Israel wants to keep united and under its control, are easier said than done. But so is completing the half-measure interim agreement that is meant to be temporary in any event. These two parties are ready for a divorce. The longer they stay together in a strained union, it seems, the tougher it is to agree on terms.

--With reporting by Dean Fischer/ Cairo, Jamil Hamad/Hebron and J.F.O. McAllister/ Washington

With reporting by DEAN FISCHER/ CAIRO, JAMIL HAMAD/HEBRON AND J.F.O. MCALLISTER/ WASHINGTON