"I think this it's going to dramatically escalate the level of violence, and not only in the Bethlehem area. Fatah as an organization issued a statement today saying they consider themselves in a state of war with Israel, and stating that they no longer consider themselves party to any agreement with Israel."
Does that mean the whole Fatah organization has now broken with its founder, Yasser Arafat?
"That's a question that should be addressed to Arafat himself, because practically, if we analyze the statement released by the organization, it means that Fatah is refusing to be party to any agreement Arafat reaches with Israel. This would mean effectively dissociating themselves from Arafat and the Palestinian Authority. It's hard to say what this means practically whether it's simply an angry emotional reaction, or a more serious break with Arafat."
Does the fact that the Israelis targeted a local leader who is supposedly defying Arafat imply that they're doing Arafat's dirty work by eliminating challenges to his leadership?
"No, not at all. The Israeli action was an expression of the army not accepting the policy of restraint which Barak has adopted until now. The army is getting impatient, particularly because it feels that it has been humiliated on more than one occasion in recent weeks. It appears they had decided the time had come for the army to punish those held responsible for killing Israelis. The man who was killed yesterday was shot dead not because he is against Arafat, but because he had been directly involved in the killing of two Israeli soldiers 10 days ago. This appears to be a tactical escalation. Even Prime Minister Barak has now said this will not be the last such operation, and that there will be more strikes against those that are firing at Israelis."
So does the latest escalation restrain Arafat in any negotiations he may be undertaking?
"No, it doesn't really put any pressure on Arafat. If anything, he can use it as an argument to escape confronting the crucial questions of where things go from here."
Has the Palestinian leadership given up on the Oslo peace process?
"Although neither side will admit it publicly, there's a tacit agreement on both sides now that Oslo has failed, and both sides are looking for an alternative to Oslo another formula. The Palestinians are putting it in terms of calling for an international presence, seeking U.N. and European participation. The Israelis are saying Oslo is not dead, but needs a serious review. Both sides have reached a conclusion that Oslo no longer the vehicle that can take them to peace. But how they're going to find a new mechanism is another question."