Power In Palestine: How Hussein Is Outplaying Arafat

Israel's huge Dead Sea Works Ltd. produces potash from sites that are at one point only a few yards from those of Arab Potash Co., one of Jordan's largest corporations and its second-largest exporter. But thanks to the 45-year state of war between Jordan and Israel, the two companies might as well be on different continents. Now, however, Dead Sea Managing Director Uri Ben Noon says he has been meeting with Jordanian counterparts to discuss joint marketing arrangements and technology sharing.

Such contacts are among the indications that Israel's talks with the Jordanians are progressing more rapidly than its widely publicized dealings with Palestinians. Although a formal peace accord between Jerusalem and Amman is still some time off, the two have been working out arrangements for managing the upcoming experiment with Palestinian self-rule in the occupied territories. Says an Israeli Foreign Ministry official: "It has been easy to negotiate with the Jordanians."

The same cannot be said for the Palestinians. Although Yassir Arafat managed to win backing for his deal with Israel from key elements of the Palestine Liberation Organization, the Palestinians remain split and disorganized on both political and economic issues. The PLO's inability to control its adherents in the territories has led to a rising tide of violence that could derail the peace process.

WILDERNESS MIND-SET. The PLO's confusion is complicating efforts of the U.S. and Europe to coordinate multimillion-dollar aid programs for the occupied territories. Donor nations are expected to meet in Paris in mid-December to sign a two-year program for $350 million to $400 million. Yet there is already dissatisfaction with Arafat's approach to development and a feeling that the PLO leader is more interested in getting cash to dole out to followers than in project aid. The Palestinian Development & Reconstruction Agency, which should be the Palestinians' key development organ, has been packed with Arafat's appointees, causing Yusif A. Sayigh, a prominent Palestinian economist on the board, to threaten to resign.

The problem, observers say, is that the PLO, after years in the wilderness, is having a tough time making the switch to being a government. That leaves them vulnerable to being outmaneuvered by the Israelis and Jordanians, who have a history of joint dealing on Palestinian matters. These countries have tremendous leverage over the emerging Palestinian entity because they control its borders, and they are advanced, sophisticated states--while it is starting almost from scratch.

Caught off guard by the Israel-PLO deal last September, the Jordanians have been making up for lost time through a series of secret meetings with Israeli leaders. The reason for the rush is simple: King Hussein, once master of the West Bank and now ruler of a country where more than half the citizens are of Palestinian origin, did not want his country marginalized or its security threatened by the new Palestinian entity. He is also hoping to get a share of the Western and Arab aid money sent to bolster the peace.

Hussein seems to have persuaded the Israelis to approve a prominent role for Jordanian banks in the occupied territories and agree that the Jordanian dinar will be the main currency there. Now, it's the Palestinians' turn to be worried by the fast pace of events. They fear that economic decisions for the West Bank--about banking, currency, and trade with Israel and Jordan--will be made in Jerusalem and Amman. If Arafat doesn't move quickly to present a more coherent front, the Palestinians will risk being left in the backseat once again.