IT'S tragic that Palestinian Authority President Yasser Arafat’s grave health crisis should coincide with Israel's stepped-up offensive in Gaza, killing 138 Palestinians, and parliamentary approval of a super-controversial plan for "withdrawal" from thcStrip.

Mr Arafat (75) has reportedly slipped into a coma. One hopes he survives. He has bounced back whenever he was written off — right since 1982, when the Palestinian Liberation Organisation (PLO) was forced to quit Lebanon.

Contrary to propaganda, Mr Arafat was never an obstacle to peace, but a precondition for it The Palestinians have rallied behind him because he put their cause on the world map through his unparalleled past contribution.

Whatever happens to Mr Arafat, the Palestinian people must reconcile themselves to a transition to new leadership. This may not be smooth, given differences between Prime Minister Ahmed Qurei, PLO secretarygeneral Mahmoud Abbas (imposed by the US upon the PA as PM last year), former interior minister Mohammed Dahlan, and the charismatic Leftwinger Marwan Barghouthi (now an Israeli prisoner).

The US and Israel will also cynically try to exploit the PLO's internal differences to prop up a pliant leader.

To resist this, the PLO must forge a strong collective leadership. Thily testing times lie ahead for the Palestinians. They have suffered grievously since the expulsion of 800,000 people from their land in 1948. The immediate challenge comes from Mr Ariel Sharon's plan to "withdraw" from all the 21 settlements in Gaza and four in the West Bank.

The plan is part of Israel's comprehensive strategy to continue its occupation under more favourable conditions while freezing the peace process. As Mr Sharon's senior adviser DovWeisglass says: "When you freeze the peace process, you prevent the establishment of a Palestinian state."

The strategy aims to expand and secure Israel's West Bank settlements.

Mr Sharon is explicit: "withdrawal* will "severely harm Palestinians" and end" the dream of a Palestinian state."

After "withdrawal," Israel will continue to exercise full control over Gaza's air, sea. and land approaches. Israel will take "pre-emptive and reactive steps to use force against threats posed from within." This is in keeping with Mr Sharon's "historic goal" of destroying die PLO.

After "withdrawal," Gaza will become a giant prison. "Withdrawal" won't change Gaza's status as an occupied territory under international law. An official Israeli study admits as much.

No wonder most Palestinians call the withdrawal "reoccupation."

Through it, Mr Sharon wants to bypass any political process and make a genuine two-stare solution near- impossible. The strategy is being implemented through numerous measures:

■ Confining Palestinians to small pockets (Area 'A' defined by the Oslo accords to be under the PA’s full control, and Area 'B' under "joint" Palestinian-Israeli security), but excluding them from Palestine’s Israeli-controlled 'C Area.

■ Obstructing the Palestinians’ movements within Areas 'A' and 'B' through checkpoints, barriers,

• Breaking up the West Bank into some 300 separate enclaves, joined by roads to which most Palestinians have no access. By contrast, Israeli settlers enjoy full access.

• Breaking up the West Bank into some 300 separate enclaves, joined by roads to which most Palestinians have no access. By contrast, Israeli settlers enjoy full access.

• Imposing tight work and residencepermits, like South Africa’s infamous "Pass Laws."

• Erecting a 700 km-long "Separation Barrier’’ (almost five times longer than the Berlin Wall). This has been declared illegal by the International Court of Justice.

This situation, I found during a recent visit, represents apartheid in practice. Compared to the brutal occupation, the Israeli military’s intrusion into daily life, and Israel’s policy of impoverishing the Palestinian people, the experience of colonialism looks like a picnic. The British exploited Indians through loot, despotic rule, and destruction of institutions. But they didn't occupy their fields or steal most of their water.

By contrast, Israel has confiscated 24 percent of the West Bank and Gaza and 89 percent of East Jerusalem for settlements, highways, military installations, etc. It controls 80 percent of the occupied territories' water resources.

Israel's post-September 2000 military campaigns have killed over 3,000 people, including 500 children. The UN Conference on Trade & Development estimates that closures and losses from military operations have drained $2.4 billion out of the Palestinian economy.

Israel uses house demolitions as instruments of terror and impoverishment - to turn the Palestinians into illegal residents in their own homeland!

In all this, Israel has enjoyed the tacit support of the US. Six months ago, this support became explicit, with a Sharon-Bush declaration. This cancelled the Palestinian refugees' right of return - a fundamental right under international law. It also upheld Israel's stand that it’s "unrealistic" to expect it to vacate all the settlements, which house420,000people. These set dements are totally illegal. Upholding them legitimises annexation of territory. No major power justified Hitler's annexation of Czechoslovakia. But the US has just done that for Israel!

The Palestine situation has turned critical.Tlie Intifadahhas temporarily stalled, and jehadi groups liave been weakened. The PA’s credibility has suffered because of the popular view that its leadership has turned "soft" and corrupt.

According to the International Monetary Fund, PA officials diverted as much as $900 million to overseas accounts between 1997 and 2003. A Palestinian Legislative Council committee found that nearly half of the PA’s $326 million 1997 budget was lost through corruption or mismanagement

Central to this network are "moderate" (read, pliant) leaders whom Israel and the US favour.

Yet. the Palestinian people’s will hasn’t been broken.They today face an imminent threat: their land being broken up into scores of Bantustans with no contiguous territory and without sovereign control over borders.

What the Palestinians need most today is leadership. At stake is world peace.

The festering Palestine crisis is one of the greatest sources of resentment fuelling popular discontent as well as Jehadi intransigence. For millions of people, it’s the touchstone of whether justice is possible within today's global order.

Without a Palestine solution, there will be neither justice nor peace in the world. We all haw a stake in a democratic, secular, free Palestine.

Praful Bidwai is an eminent Indian columnist