Secretary of State Colin L. Powell recently observed that the Palestinians "need to understand that [terrorism] leads nowhere," and on this basis he urged them to stop their violence against Israelis. Good policy advice, but does the Palestinian use of

Secretary of State Colin L. Powell recently observed that the Palestinians "need to understand that [terrorism] leads nowhere," and on this basis he urged them to stop their violence against Israelis.

Good policy advice, but does the Palestinian use of violence truly lead nowhere?

The violence, after all, has a clear and ambitious strategic purpose, as Hassan Ayoub, director of the Palestine Liberation Organization's executive committee office in Nablus, explained a few months ago: "Now, it's a finger-biting game between the Israelis and the Palestinians. The first one who says ouch is the one who loses. And nobody's going to say ouch no matter how bad it hurts." In other words, a war of wills is underway.

The Palestinian Authority (PA), vastly inferior to Israel in the military realm, hopes to make Israel "say ouch" by deploying terrorism against its civilians. Because the PA itself cannot sponsor terror, it delegates this task to Hamas and Islamic Jihad. "[Yasser] Arafat uses Hamas to bleed Israel, to wear it down," correctly observes Ephraim Inbar of Bar-Ilan University. If the PA succeeds in bleeding Israel enough, it will extract larger concessions from it.

Terrorism, in short, is integral to the PA's negotiating. "The Palestinian leadership uses terrorism to 'accelerate' the Oslo process," writes the Boston Globe's Jeff Jacoby, thereby rendering Israelis "so desperate and demoralized that they will make even deeper concessions, surrender even more land, and struggle even harder to make peace with their enemies."

Specifically, the PA seeks a total Israeli withdrawal from the West Bank and Gaza, Palestinian control over the Temple Mount in Jerusalem, and massive numbers of Palestinians permitted to live in Israel. It wants, to be blunt, a start to the dismantling of the Jewish state.

Arafat's speech yesterday, in which he both condemned violence against Israel and demanded a "right of return" for millions of Palestinians to Israeli territory, broke no new ground but merely reiterated some tired rhetoric of his. The U.S. government properly responded by demanding not words but "concrete action."

Israel has a counterstrategy, one increasingly evident since Ariel Sharon became prime minister in early 2001: It is to show Palestinians the futility of their dream to destroy Israel by squeezing them through the loss of mobility, a steep decline in living standards, and a collective malaise.

"Look," Israel is in effect saying, "this is getting you nowhere. Give up your dream of destruction. Make a deal with us."

Who is winning?

Through the '90s, Israeli confusion and illusion permitted the Palestinians to get the upper hand. But since Sharon came to office in March 2001, Israelis have found their old spirit, their old unity and their old purpose.

The paralyzing divisions of the '90s have nearly disappeared, as have the self-hating "post-Zionism" themes (which ridiculed Israeli patriotism) and the defeatism (which prompted a unilateral withdrawal from Lebanon).

The shift is no less dramatic on the Palestinian side. The militant Islamic suicide bombings may suggest robust determination, but they mask widespread despair and pessimism. How else to explain the sudden offer (and embarrassed retraction) last week of a temporary truce with Israel by the military wings of Hamas, Islamic Jihad and two military groups connected to Arafat?

Note too that Arafat recently appointed Sari Nusseibeh, a moderate Palestinian who accepts Israel's right to exist, as his representative in Jerusalem.

Palestinians fully know how much they have sacrificed over the past year - the lives of their children, their personal well-being - and how little they have accomplished. Such failure makes it hard for them to sustain the political will to destroy Israel.

Should Yasser Arafat exit the political scene, that goal will become even more remote. The Palestinian Authority could well split in two, for it consists of two geographically separate regions (the West Bank and Gaza), each dominated by a strongman (respectively, Jibril Rajoub and Mohammed Dahlan).

If these toughs emerge as rulers of their areas, as seems likely, the Palestinian national movement will be fractured as never before, and the battle against Zionism will become yet more difficult.

For these reasons, a rapid decline of Palestinian will appears likely, as has happened several times before (in 1939, 1949, 1967, 1991) - though this one could well be more severe.

There is good news here: If Israelis can sustain their recent sense of common purpose and resolve, Palestinians may give up - perhaps permanently - on their goal of destroying Israel.

And should that happen, an end to the century-long Palestinian-Israeli conflict could finally be in sight.