Bad News Is Good News for Netanyahu

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The Palestinian cabinet Thursday night repeated Yasser Arafat's pledge to declare a Palestinian state, despite Israel's warning that it will respond with "unilateral action." Rhetoric aside, Arafat's plan -- which he is expected to pitch to the U.N. General Assembly on Monday -- may be good news for Benjamin Netanyahu. "It would free Netanyahu of any obligations under the Oslo peace accords, which he opposed, and would freeze the current situation in Palestinian territories," says TIME Jerusalem bureau chief Lisa Beyer. "That would mean a Palestinian state in half of Gaza and a few islands of the West Bank."

Arafat's U.N. campaign is designed to win maximum international support for a unilateral declaration of independence in May 1999, but that too could be a double-edged sword. Washington is unlikely to recognize the new state a year before Al Gore runs for president, while recognition by European countries may signal a sense of closure on the Palestinian question: "Recognizing a small Palestinian state allows the international community to wash its hands of the Palestinian issue," says Beyer. But with Netanyahu showing little sign of advancing the peace process on any other front, Arafat may well feel that he has no option.