Newly-elected Palestinian leader Mahmoud Abbas faces two major challenges: reforming Yasser Arafat's corrupt thugocracy and securing a Palestinian state through negotiations with Israel. Progress on both fronts is likely to be slow, if it comes at all, because Abbas is a member of Arafat's old guard and doesn't want to undermine his own power.

Abbas is likely to push much harder initially for internal reforms, which could enhance his power and popularity, rather than for peace, which inevitably entails taking risks that could deflate his popular support or even lead to his assassination by militants who oppose negotiations with Israel.

In part, Abbas would place reform before peace because there's a solid Palestinian consensus that Arafat's corrupt and incompetent authoritarian regime needs radical reform, but there's no realistic Palestinian consensus about what a final peace settlement would look like.

Abbas has sent mixed signals about his intentions. As prime minister, he pragmatically broke with Arafat when it became clear that Arafat's implacable commitment to terrorism and political violence undermined the interests of the Palestinian people. And he did seek, unsuccessfully, to dilute Arafat's power and launch reforms that would have mitigated the rampant cronyism, corruption and arbitrariness of Arafat's authoritarian rule.

On the other hand, despite the fact that the wily Arafat thwarted Abbas' efforts at reform and forced him to resign in 2003, Abbas emphasized his ties to Arafat on the campaign trail. This may have been sound strategy to win an election, but it will make it harder for Abbas to make the clean break with Arafat's legacy necessary to give peace a chance.

Moreover, during the campaign, Abbas embraced Palestinian militants and promised to shield them from Israeli forces. "We will not forget the wanted, the heroes," he proclaimed at a Jan. 1 rally. "They are fighting for freedom."

Abbas also made it clear that he won't crack down on Hamas, the radical Islamic movement that has perpetrated numerous terrorist attacks against Israelis, including many of the most horrific suicide bombings. This reluctance to take on Hamas and other militants, including many within his own Fatah faction, means he won't be able to negotiate an agreement with Israel. Israeli Prime Minister Ariel Sharon underscored this point on Jan. 14 when he responded to a terrorist attack that killed six Israelis by ruling out contacts with Abbas until he takes action to fight terrorism.

Abbas needs to know that it does him no good to embrace Hamas in the name of Palestinian unity or to seek its cooperation in peace negotiations. In fact, it's hard to see how a durable Israeli-Palestinian peace is possible unless the terrorists first suffer a decisive defeat in a Palestinian civil war. Otherwise, they will simply continue to sabotage any efforts at peace.

British Prime Minister Tony Blair has proposed an ambitious summit meeting to jumpstart Israeli-Palestinian negotiations. But this initiative likely will be scuttled because of the impasse over the latest terrorist attack. Before Abbas can work toward peace, he must consolidate his power, establish control over the numerous Palestinian security services and fractious militias and make systematic efforts to fight terrorism.

For these reasons, the Bush administration should take a cautious and patient approach to Israeli-Palestinian peacemaking. It shouldn't rush into a premature summit, as President Clinton did at Camp David in July 2000.

Instead, Washington should ensure that all parties understand that peace negotiations will be a long, arduous, incremental process. Initially, negotiations should focus on step-by-step measures to rebuild the mutual trust shattered by Arafat's policies.

Washington should help facilitate Palestinian cooperation with Sharon's proposed withdrawal from the Gaza Strip, scheduled for later this year. And it should do what it can to help Abbas build support for peace among his people.

But it must accept that Abbas isn't in a position to move rapidly on negotiations in the coming months. Long-overdue Palestinian reforms and an irreversible break with Arafat's legacy of terrorism and treachery must come before any peace agreement can be negotiated.

James Phillips is a research fellow in Middle Eastern affairs at The Heritage Foundation (heritage.org).