Quotes of the Day

Mahmoud Abbas and Ariel Sharon were the leaders in the spotlight last week as the Palestinian and Israeli Prime Ministers shared a warm grip-and-grin to launch peace talks. But sidelined Palestinian leader Yasser Arafat retains considerable clout and wants to prove he is indispensable. Abbas, who replaced Arafat at the negotiating table after being named Prime Minister, has secured a cease-fire from Palestinian militant groups. That prompted Israel to begin withdrawals from towns in the West Bank and Gaza. But Abbas faces opposition within his own Fatah faction and must crack down on renegades. To do so, he is quietly working with Arafat, who still controls much of the Palestinian security apparatus. When senior Palestinian security officials met in Bethlehem just before Israel handed over control of the city, the gathering was headed by Haj Ismail Jabr, chief of the National Security Forces in the West Bank and an Arafat underling, officials who were there tell TIME. Jabr warned he would brook no violence against Israel. "We're going to apply the law," he said. "Even if you see me running a red light, issue me a ticket."

Sharon is facing pressure of his own. His trusted security chief, Avi Dichter, has advised him to wait before pulling out of more Palestinian towns, to be sure Abbas is arresting and thwarting terrorists. Israeli intelligence sources tell TIME that Iran is channeling money to small gangs of Fatah operatives, trying to persuade them to break the cease-fire. It will take more than handshakes to fight that.

• Matt Rees, Jamil Hamad and Aharon Klein