President Bill Clinton faces a critical test when he meets with Palestinian leader Yasser Arafat at the White House on March 23. The Israeli-Palestinian peace negotiations begun in Oslo, Norway, in 1993 are on the verge of collapse, primarily because of Arafat's failure to abide by his commitments to help to safeguard Israel's security against terrorism. Arafat has made a bad situation even worse by threatening to declare Palestinian statehood on May 4, 1999, when the five-year period of interim Palestinian rule established by the Oslo accords expires. Such a unilateral action would precipitate a violent confrontation with Israel and explode the prospects for a stable peace.

President Clinton must defuse this ticking time bomb. He should sternly warn Arafat that a unilateral declaration of Palestinian statehood would represent a grave violation of the Oslo accords and would trigger a cutoff of U.S. aid to the Palestinians. Arafat must be convinced that he would have little to gain and much to lose if he shirked his commitments and unilaterally proclaimed Palestinian statehood.

THE OSLO BREAKDOWN

Israel has suspended the implementation of the Wye River accord, signed only last October, due to allegations of Palestinian noncompliance. Israeli Prime Minister Benjamin Netanyahu has complained bitterly that Arafat's Palestinian Authority has defaulted on its obligations to reduce the size of the Palestinian police to the 30,000 allowed under Oslo; confiscate illegal weapons from Palestinian civilians and police; outlaw and systematically combat Palestinian groups that support terrorism against Israelis; arrest terrorists and end the "revolving door" policy that quickly frees terrorists from Palestinian jails; and refrain from inciting violence against Israelis.

The Palestinians also are misrepresenting the May 4, 1999, deadline. Contrary to Palestinian claims, the Oslo accords do not expire on that day. This is only the projected end of the five-year interim period of Palestinian self-rule, not the end of the peace process itself. The Oslo accords set no expiration date because both sides agreed that the accords would remain in effect on a permanent basis. Although the 1993 Declaration of Principles stipulates that the two sides must complete the negotiations by the end of the five-year interim period, it would be appropriate to extend the negotiating period if no agreement were reached by May 4. A unilateral Palestinian declaration of independence, however, would deliver a fatal blow to the ailing peace talks and set the stage for a bloody confrontation. Violent clashes would be inevitable as both sides sought to establish control over disputed territory. The biggest losers in such a scenario would be the Palestinian people.

Nevertheless, Arafat clings to the statehood option. Part of the blame for this can be laid at the doorstep of the Clinton Administration, which has sent conflicting signals on that critical issue. First Lady Hillary Clinton stated on May 6, 1998, that it would be in the "long term interests of the Middle East for Palestine to become a state." President Clinton's December 14, 1998, visit to Gaza had many features of a state visit. The Palestinians certainly drew this conclusion, displaying banners featuring Clinton and Arafat with the caption, "We have a dream: Free Palestine." Congress has tried to stiffen the Administration's spine on the statehood issue. The Senate on March 11 overwhelmingly passed a resolution that called on the President to "unequivocally assert United States opposition to the unilateral declaration of a Palestinian state." The House passed a similar resolution on March 16.

In his upcoming meeting, Arafat is expected to ask for President Clinton's promise to support a Palestinian state. In return, Arafat reportedly would agree to delay statehood, perhaps until January 1, 2000. The President must firmly reject this offer. It only would reward Arafat's brinkmanship and encourage him to engage in other negotiating gambits prohibited by the Oslo accords. Instead of caving in to Arafat's pressure, President Clinton should:

• Denounce a unilateral Palestinian declaration of statehood as a violation of the Oslo accords that would trigger a cutoff of aid from the United States.
  The Clinton Administration not only should refuse to recognize a unilaterally declared Palestinian state, but should urge other states to withhold recognition and work to penalize the Palestinian Authority for violating the Oslo accords. U.S. aid to the Palestinians, currently $400 million per year, should be withdrawn.

• Insist that Arafat abide by his commitments under the Oslo accords and negotiate the statehood issue directly with Israel.
  President Clinton should tell Arafat firmly that if he wants statehood, the only acceptable avenue for attaining it is through negotiations with Israel. Clinton also must insist that Arafat strictly adhere to past agreements if he hopes to gain Palestinian statehood in a future agreement.

• Urge Arafat to seek an agreement with Israel to extend the negotiating period for final status issues.
  There is nothing sacred about the May 4, 1999, target date for a final status agreement. Every target date originally established for the interim negotiations has been missed; it is not realistic to expect the final target date to be met. Both sides should agree to extend the timetable for negotiations to give them a realistic chance for success.

CONCLUSION

By threatening to declare Palestinian independence, Arafat also is threatening to destroy the Oslo peace accords. President Clinton should warn him that such a policy would do severe harm to bilateral relations, provoke a cutoff of aid from the United States, and deprive Palestinians of a chance to attain statehood through peaceful negotiations.

James A. Phillips is Director of Administration for The Kathryn and Shelby Cullom Davis International Studies Center at The Heritage Foundation.