Arafat hopes to reap windfall in Geneva. PLO chief seeks Western backing for statehood with crucial UN speech

Yasser Arafat today delivers what is probably the most important speech of his career. His aim: acceptance of an independent Palestinian state by leading Western nations. To reap the potential windfall offered by today's opportunity to address the UN General Assembly, the Palestine Liberation Organization's chairman will have to sweep away the ambiguities that have kept outsiders guessing about his group's exact intentions toward Israel.

Any definitive acceptance of Israel by Arafat, coupled with an unqualified rejection of terrorism as a means to advance the cause of Palestinian statehood, would transform Middle East peace prospects and throw relations between Israel and the United States into a state of crisis, diplomatic observers say.

``This is the most important international event ever for Arafat,'' says a senior Jordanian official. ``It's a landmark.''

The official was with Mr. Arafat in Amman late last month, when the US refused the PLO leader a visa to come to New York to address the UN.

The official says the PLO chief was ``genuinely surprised'' by the news, but quickly realized the public relations benefits that could accrue from being cast in the role of underdog.

The US action was denounced worldwide, and the General Assembly voted to move its debate on the Palestinian issue to Geneva so Arafat could speak.

In Amman, Arafat was urged to maximize his advantage by delivering a short, clear appeal for peace free of anti-US polemics, says another Jordanian source. Arafat is also under pressure from some Arab moderates to go beyond recent pronouncements by clearly recognizing Israel and renouncing terrorism.

Many inside the PLO appear reluctant to take those steps without some promise of reciprocity from the US and Israel.

Following Arafat's speech today, the PLO is expected to press for two UN resolutions calling for:

A UN-sponsored Middle East peace conference.

UN recognition of the Palestinian state declared by the Palestine National Council (PNC), the PLO's legislative arm, last month in Algiers.

Arafat is seeking to capitalize on a more moderate PLO image first signaled in June when a top Arafat lieutenant, Bassam Abu Sharif, said Palestinians were ready to live in peace with Israel.

The image was reinforced last month when the PNC implicitly recognized Israel and for the first time embraced UN Resolutions 242 and 338, albeit with qualifications.

The PLO ``changed its position from one of total rejection of Israel's right to exist as an exclusive Zionist state to one of full acceptance of Israel,'' under the terms of the UN resolutions, Mr. Abu Sharif says. The resolutions require Israel's withdrawal from territories occupied in the 1967 Mideast war in exchange for peace.

On a visit to Stockholm, Arafat appeared to go even further when he issued a statement that for the first time accepted the existence of Israel by name - though not the actual right of Israel to exist as demanded by Israel and the US.

Arafat also said in Stockholm that the political program adopted in Algiers ``abrogated and nullified'' the PLO's 1964 covenant, or charter, which calls for the destruction of the ``Zionist state.''

The strength of Arafat's position today is reflected in the warm support the Algiers and Stockholm declarations have received in Europe, where opposition to the US visa refusal is strong.

A surprising turnabout occurred in London last week: The Foreign Office, in a statement issued after Stockholm, praised Arafat for unequivocally recognizing Israel and voiced displeasure with Israel for its unwillingness to reciprocate with positive signals. Just days before, Britain was the only European nation to abstain from voting on a UN resolution censuring the US for its visa refusal.

And this past weekend saw a meeting between Abu Sharif and a British Foreign Office official. The first such meeting in five years with the PLO was described by the British as part of an effort to encourage Palestinian moderation.

Support from Europe is considered critical if the US and Israel are to be persuaded that the PLO is an acceptable partner in future Mideast peace talks. Officials in Jordan and elsewhere have stressed that European leaders can play a key role in finding a formula for negotiations acceptable to the US and Israel.

In the run-up to Arafat's address, officials in Israel have sought to discredit events in Algiers and Stockholm. One Israeli argued that by failing to accept Israel's right to exist and fully renounce terrorism, Arafat is ``trying to buy everything without paying anything.''

Sources in Jerusalem said last week that they are not convinced by Arafat's claims of willingness to live with the Jewish state. His statements, they point out, were coupled with language - such as descriptions of Israel as a ``fascist'' state in the recent Algiers declaration - that seems clearly designed to cast doubt on Israel's legitimacy.

``How serious can the PLO be in really accepting the state of Israel in the area if they really think this is what we are?'' asks Asher Susser, a specialist on the PLO at Tel Aviv University's Dayan Center for Middle Eastern and African Studies.

In any event, says one Israeli Foreign Ministry official, words by Arafat alone mean little unless backed up the the PNC, the PLO's highest policymaking body, which has lagged behind Arafat in its willingness to live with Israel.

``Arafat has probably gained more points when it comes to public relations'' than Israel has, says Foreign Ministry spokesman Alon Liel. ``But he's running ahead of the PNC. For us, the important decisions are made by the PNC.''

At the same time, some Israelis concede that by being overly negative and legalistic in its responses, Israel has done little to advance its cause.