SOAKED IN BLOOD

SUICIDE BOMBERS DEVASTATE A JERUSALEM MARKET. WILL THE U.S. STEP IN TO REVIVE THE PEACE TALKS?

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To Arafat the cascade of events felt like an avalanche. By being lax on security issues, he had flirted with trouble, and the extremists had taken advantage. Before the bombing, the U.S. was prepared to lean on Netanyahu to make concessions that would restart negotiations, but now, suddenly, the full weight of American pressure has been shifted onto the Palestinians. In addition, the sting of Israel's reprisals comes at a time when Arafat's government is squirming under revelations of corruption.

None of these points were lost on the Palestinian extremists who claimed responsibility for the explosions. "Our first goal was to bring down Arafat's administration," says "Abu Assad," a senior figure in the military wing of Hamas. According to him, the group was trying to prevent the anticipated full resumption of joint antiterror measures between the Israelis and the Palestinians. "This cooperation," notes Abu Assad, "is done at our expense." Then, in a boast that might be only bravado, the Hamas activist claimed, "We were about to assassinate Dennis Ross" on one of his previous peace shuttles. U.S. officials say there have been several threats against Ross, but no "near miss" attempts. Yet Abu Assad's unconfirmable declaration bespeaks a growing Palestinian discontent with the American mediation role.

The opponents of peace are adept at timing their deadly attacks to coincide with the resumption of momentum. Only two days before the bombing, it looked as if relations between the Israelis and the Palestinians were moving back to normal after a four-month chill. The standstill had been provoked by Netanyahu's decision to build a new Jewish settlement in mostly Arab East Jerusalem, and that in turn led Arafat to restrict security cooperation, curtailing intelligence sharing and easing up on commitments to collect weapons, jail militants and stop calls to violence. On the Monday before the bombing, Israeli and Palestinian officials announced that at last the two sides would resume negotiations on outstanding disputes, paving the way for Ross to present an American initiative aimed at striking specific compromises. But the upbeat news was a call to arms for the Islamists, who are dedicated to sabotaging a peace process they regard as illegitimate.

When Arafat phoned Netanyahu an hour after the bombing to express his condolences, he received a furious dressing down. In a conversation Netanyahu's office called "difficult and pointed," the Prime Minister accused Arafat of having "encouraged the violence" by refusing to act against the Islamists. "You must change your policy 180 degrees," he insisted.

Netanyahu indefinitely closed Israel's borders to all Palestinians, putting some 100,000 day laborers out of work. He banned travel within the West Bank, cooping up Palestinians in their hometowns and handicapping normal commerce. For the first time, the Israeli government said it would stop paying out several million dollars it owes the Palestinian Authority in tax refunds. The Israelis also decided to jam broadcasts of the Palestinian Authority's official Voice of Palestine radio station, whose transmissions have recently been filled with anti-Israeli invective.

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