the occupation did not end. This situation was much more dangerous than perceived initially.

There was a sharp contradiction between the "state in the making" and the continuation of the liberation struggle. One of its expressions was the new class of authority-owners, who enjoyed the fruits of government and began to smell of corruption, while the mass of ordinary people continued to suffer from the miseries of the occupation. The need to go on with the struggle clashed with the need to strengthen the Authority as a quasi-state.

Arafat succeeded with great difficulty in balancing the two contrary needs. For example, it was demanded that the financial dealings of the Authority be transparent, while the financing of the continued resistance had necessarily to remain opaque. It was necessary to reconcile the Old Guard, which ruled the Authority, with the Young Turks, who were leading the armed struggle organizations. With the death of Arafat, the unifying authority disappeared, and all the internal contradictions burst into the open.

The Palestinians might conclude from this that the very creation of the Palestinian Authority was a mistake. That it was wrong to stop, or even to limit, the armed struggle against the occupation. There are those who say that the Palestinians should not have signed any agreement with Israel (still less giving up in advance 78 percent of Mandatory Palestine), or, at least, that they should have restricted it to an interim agreement signed by minor officials, instead of encouraging the illusion that a historic peace agreement had been achieved.

On both sides there are voices asserting that not only the Oslo agreement, but the whole concept of the "two-state solution" has died. Hamas predicts that the Palestinian Authority is about to turn into an agency of collaborators, some sort of subcontractor for safeguarding the security of Israel and fighting the Palestinian resistance organizations. According to a current Palestinian joke, the ‘two-state solution" means the Hamas state in Gaza and the Fatah state in the West Bank.

There are, of course, weighty counter-arguments. "Palestine" is now recognized by the United Nations and most international organizations. There exists an official worldwide consensus in favor of the establishment of the Palestinian state, and even those who really oppose it are compelled to render it lip service in public.

More importantly: Israeli public opinion is moving slowly but consistently towards this solution. The concept of "the whole of Eretz Israel" is finally dead. There exists a national consensus about an exchange of territories that would make possible the annexation of the "settlement blocs" to Israel and the dismantling of all the other

114