An attempt by the Prime Minister, Mr Benjamin Netanyahu, to close down offices at the Palestinians' Orient House headquarters in East Jerusalem has brought the Israeli government into direct confrontation with the Palestinian Authority. Sources on both sides were warning last night of the possibility of bloodshed if the dispute was not resolved peacefully.
Mr Faisal Husseini, President Yasser Arafat's Jerusalem affairs chief, rejected an Israeli Internal Security Ministry proposal for the Palestinians to move two of the offices to the West Bank and stop hosting foreign ambassadors at the building.
Mr Husseini, who was consulting Mr Arafat in Ramallah, described Orient House as "a symbol of peace". If it were closed, he said, "people will see it as the end of the peace process". Dozens of Palestinians gathered in front of the building in late afternoon, vowing to resist any effort by Israeli police to enter.
Mr Netanyahu has been vowing to put a halt to Palestinian "political activity" in Jerusalem almost from the day he took office three years ago. Although he has claimed several times since then to have done so, and while Mr Husseini insists the Orient House offices are doing nothing deemed illegal under Israeli law, the Prime Minister is now insisting that orders to close three offices in the complex be implemented.
Coming exactly a week before Israel's general elections, the move seems transparently designed to highlight Mr Netanyahu's tough-guy credentials on Jerusalem - an issue on which he evidently perceives his leading opponent, Mr Ehud Barak, head of the moderate One Israel alliance, to be vulnerable.
Mr Barak is about 8 per cent ahead of Mr Netanyahu in most opinion polls, and Mr Netanyahu well remembers how he overcame a still greater deficit in the polls three years ago to win the prime ministership.
In part he achieved this by arguing that his then opponent, Mr Shimon Peres, was prepared to relinquish parts of the city to Palestinian control.
Other Israeli leaders, wary of being outsmarted by Mr Netanyahu, are restating their determination not to give the Palestinians any sovereign rights in the city, a stance on which there is broad consensus in Israel. But they are simultaneously accusing the Prime Minister of risking violence for the sake of his failing political campaign. "He's acting like a bull in a china shop," said Mr Matan Vilnai, a former general and senior One Israel politician.
What's more, the man charged with implementing the closure orders, Internal Security Minister Mr Avigdor Kahalani, seems determined not to be bullied by Mr Netanyahu, and has been content to hold several meetings with Orient House lawyers in recent days to try to find a compromise.
The Palestinians may yet be able to stay any closure until after the elections, by filing an appeal with the Israeli Supreme Court.
Mr Netanyahu's attempt to boost his re-election hopes by making an issue of Orient House underlines the anti-Palestinian nature of much of his campaign.
Far from expressing the desire for a deepened partnership with Mr Arafat, the Prime Minister's campaign advertisements depict the Palestinian leader as a cunning foe, hoping that Mr Barak will win because it would be easier to extract concessions from him.
Mr Barak, for his part, has hardly referred to the Palestinians in his TV ads, realising that all Israeli moderates will vote for him anyway, and that ex-Netanyahu supporters are more likely to be wooed by his promises of economic improvement than by talk of closer ties with Mr Arafat.