Israel's decision yesterday to release to the Palestine Authority one-third of the $72 million in taxes collected from Palestinians by the Israelis could complicate rather than improve relations between the Authority President, Mr Yasser Arafat, and his people.
This is because the funds released should pay the salaries of the 65,000 policemen and administrators employed by the Authority, the majority of whom are deeply resented immigrants from abroad.
Meanwhile, the majority of Palestinian inhabitants of the self-rule enclaves and occupied territories remain under siege.
On Sunday two lorry-loads of Israeli farm produce and one of tissues were refused entry to Gaza under orders from a ministerial boycott committee established by the Authority. It has drawn up a list of Israeli products to be banned from Palestinian areas.
Since the items must have equivalents of Palestinian manufacture, the list is a short one but the Authority hopes that Israeli manufacturers and producers of banned items will exert pressure on the government to lift the closure on the enclaves.
Israeli exports to the Palestinian areas amount to $9 million a day, accounting for 90 per cent of imports.
The introduction of banned items must be "selective and gradual", Dr Ghassan Khatib, a former member of the Palestinian negotiating team, told The Irish Times, because "there is not a positive atmosphere between the decision-makers and the people. Today the decision-makers are not part of the people like during the Intifada" when the local leadership decreed a general boycott of Israeli goods.
"Then the leadership suffered with the people; today the people know that the leadership won't sacrifice their comforts to observe a ban."
Dr Khatib also said that because of popular alienation the Authority had "no possibility" of making mass arrests of Hamas and Islamic Jihad activists or dismantling what the Israelis call the "terrorist infrastructure".
"The Authority's police cannot arrest anyone without making the connection between that person and the suicide bombers" who blew up themselves and 14 Israelis on July 30th at the Mahaneh Yehuda market in Jerusalem.
"The identities of the bombers remain a mystery", said Dr Khatib. "The Israelis have not been able to make any connection between the Authority and the bombers. The head of Israeli intelligence has gone to London to follow up leads there.
"Without concessions from [the Israeli Prime Minister] Netanyahu or firm American intervention there is no possibility of improvement in the situation," he said. As a result Mr Arafat has "very little room for manoeuvre".
Fearful of alienating powerful personalities or groups among loyalists, Mr Arafat has postponed cabinet changes decreed last month by the Palestinian Legislative Council following its report on corruption within the executive branch of the Authority.
Instead of conducting a campaign of mass arrests against Islamic opponents, he has invited them to participate in a "national dialogue" which should be convened soon.
In an effort to maintain control of the volatile street Mr Arafat's own Fateh movement has been participating alongside Islamists in demonstrations against Israel's punitive policies.
Meanwhile, the Palestinian Foreign Minister, Mr Farouk Kaddoumi, visited Damascus to make arrangements for Mr Arafat to meet the Syrian President, Mr Hafez al-Assad.