COLUMN ONE : Palestinian Hopes at Dead End : Yasser Arafat and other leaders lost the gains of five years of moderation by backing Iraq. Today, prospects for a homeland are no greater than they were 43 years ago.

SAFWAN, Iraq —  For decades, this highway through hell has been the road of hope out of Palestine.

The narrow slice of blacktop, which cuts through the desert out of Basra and winds through the rich oil fields of Kuwait, was built in the 1960s by the fledgling construction company of Yasser Arafat when the Palestine Liberation Organization was being hatched. Palestinians since have traveled the road from Amman to the Persian Gulf when they ran out of hope at home. But now, time has run out on the other end.

For many Palestinians, the journey ended this spring where it began, in Safwan, a ramshackle town on the Iraqi-Kuwait frontier--a spot on the road home from the Gulf for thousands of Palestinian exiles, deportees and refugees of the Gulf War.

“We haven’t food, we haven’t water, we haven’t anything,” said Gassen Mutlak, 23, the son of a Palestinian who emigrated to Kuwait in 1968, as he and nine Palestinians stood aimlessly at the roadside one recent afternoon.

Taken prisoner by the Iraqis during the war, the men later had made it back as far as Kuwait city’s outskirts before Kuwaiti authorities intercepted them. They were shipped back across the border. Now they could not return to Kuwait, feared to go on to Baghdad and were uncertain how to get home--wherever home was.

“My father, my mother, my wife, my brother in Kuwait. What do I do? After 23 years I live in Kuwait. Now, no. Why not? Because I am Palestinian,” Mutlak said.

Ibrahim Mohammed Awad, a Kuwait University student, interrupted him, adding: “Our dream is broken. There is nothing. There are no dreams after this moment.”

Palestinians compare the occupation and subsequent deportations, arrests, torture and harassment that are driving Kuwait’s roughly 400,000 Palestinians from the Gulf to the “catastrophe,” the Palestinian exodus from Israel when the Jewish state was created.

For Palestinians, Kuwait “is a paradise lost that will never be gained again,” a senior Kuwaiti official vowed. “Let them be relegated to the forgotten. . . . Every one of them is a ticking time bomb.”

The end of the Gulf War has left the Palestinians in a political and economic crisis. Four decades after Israel was carved out of Palestine, the 3-year-old uprising, or intifada , is stagnating. The Palestinians are no closer to finding a permanent homeland than they were in 1948.

The economic losses stemming from the PLO leadership’s controversial support of Iraq during the war are believed to exceed $12 billion, according to the group’s official estimates.

Factional violence in the Israeli-occupied territories has taken a dramatic upswing, with more Palestinians being killed by other Palestinians this year than by the Israeli army.

For the Palestinians, the war is not over yet--a proposition with grim prospects for the region.

“Until now, we have the control. But for how long?” PLO Chairman Arafat said in a recent interview. “The typhoon is still waiting--the typhoon of turmoil. . . . What is going now everywhere, everywhere under the surface. Explosions.”

Deeply disillusioned by the twin setbacks of Iraq’s defeat and the “new world order’s” so-far failed promise of a resolution to the Palestinian conflict, some moderates who helped orchestrate the PLO commitment to moderation and political resolution--even some of those who opposed Arafat’s strong public backing for Iraqi President Saddam Hussein--have begun to re-evaluate.

“We have lost a lot,” sighed Hani Hassan, an original founder of Arafat’s mainstream Fatah faction. With strong connections to Saudi Arabia’s ruling family, he has been one moderate flagged by the Gulf states during the crisis as a possible successor to the PLO chairman.

“My direction was always the West, even when the Soviet Union was a superpower,” he said. “I always knew our future lay with the West. But now . . . after all that has happened, I am feeling humiliated. . . .

“I begin to feel that to look for a political solution originally was wrong. Theoretically, it is right. But practically speaking, we will be inhabitants of a Palestine owned by the Israelis. Why make such a solution? And I can say to you that if there is no solution, what have we to do than to fight?”

Weakened Hand

Besides its economic devastation, the Gulf War has left the Palestinians gambling for a homeland with a dramatically weakened hand. Before Kuwait’s occupation, the Palestinians were preparing to name an independent delegation to sit directly with the Israelis to discuss local elections and, at some point, to talk about creation of an independent Palestinian state.

Now, most Western and Arab diplomats closest to the peace process say the best that the Palestinians can hope for is to sit on a joint delegation with Jordan. The near-term agenda, they say, will be not Palestinian statehood but a return to the 1978 Camp David accords’ plan for some kind of autonomy in the Israeli-occupied West Bank and Gaza Strip for at least five years, with a mechanism for local elections. After five years, most PLO leaders glumly predict, all talk of an independent Palestinian state will be a dim memory.

The Gulf War, analysts say, has within a few short months cost Arafat most of the gains netted during more than five years of diplomacy and an official policy of moderation.

“The PLO leaders made a terrible mistake in picking the wrong horse, and as a result they’re going to have to pay a big price . . . they’re going to have to settle for less than what they really want,” said a Western diplomat directly involved in the current peace negotiations.

Sitting in a Mediterranean villa at PLO headquarters last week, Arafat fumed.

“Why?” he thundered when asked about proposals to offer the Palestinians autonomy, but not statehood, in the occupied territories. “Why? Why? Why? Why I have to accept this? . . . You want to give the chance for Israelis to continue swallowing the land, confiscating the land, building new settlements, bringing new Jews from the Soviet Union? . . . OK, if this is your target, there will be no peace.”

As Arafat and other PLO leaders sit frustrated in Tunis, Palestinian leaders in the occupied territories are growing stronger and demanding a more direct voice running the uprising. In some cases, local Palestinians have begun to express frustration with the PLO’s failure to control gang warfare that has erupted in the territories or to stop the arrests, tortures and other human rights violations against the roughly 160,000 Palestinians still in Kuwait.

“The Palestinian government-in-exile has to act, and act quickly. If it is unable to do something, maybe it should step down and let new and more capable members do the job,” the East Jerusalem-based newspaper Al Fajr wrote in a recent editorial.

Faisal Husseini, one of the most prominent Palestinian leaders in the West Bank and a member of the Palestinian delegation that met with U.S. Secretary of State James A. Baker III on his last two trips to the region, admitted that Palestinians have lost some of their bargaining power.

“We don’t have enough force to impose any solution, but we have enough force to paralyze any solution which will not meet our aims,” he said. “Because of that, we became suddenly an important element in any peace process, even after the war, even with the weak position that we came out from the Gulf War (which) . . . at least put again the Palestinian question on the agenda.”

Crucial Period

Most PLO leaders blame the United States for not pressuring Israel--as it did Iraq--into accepting U.N. resolutions on occupied territory. The Palestinians have been losers, they say. But in the end, the entire Arab world lost the Gulf War.

“I think we have paid the price of the defeat of Iraq more than we deserve,” said Sami Musallam, a senior Arafat adviser. “But the political cost is paid not just by the PLO but by the whole Arab nation. Even the victors in the Arab nation have been defeated. Because, first of all, they invited foreign troops in their territory, and secondly, they participated with those foreign troops to destroy two Arab states, Iraq and Kuwait, and they were not even thanked for that.”

Yet the Palestinians find themselves at what may be the most crucial period in their recent history without the Arab backers who have exploited, nurtured, threatened, financed and protected them; the Palestinians, the one remaining credible force for pan-Arabism in the Middle East, are more isolated than ever before.

Not only is Arafat unwelcome in the Gulf (he wasn’t allowed to leave his jet when it landed in Dubai last fall), Foreign Ministry officials in Egypt, the PLO’s virtual mentor last year, say he has not been and will not soon be invited to Cairo.

The PLO has moved in recent weeks to repair relations with its historic adversary, Syria. But Arafat admits that the Gulf wounds will take longer to heal:

* Qatar has expelled much of its small Palestinian community, including all four PLO representatives.

* Saudi Arabia has allowed most Palestinians to remain in the private sector but has pulled them from jobs in the defense and interior ministries.

* Five of six Gulf states have stopped collecting 5% taxes from Palestinian workers for the PLO and have suspended overall aid that exceeded $1 billion over the last decade.

* Kuwait, home of the richest community of the Palestinian diaspora and the state that nurtured most of the current PLO leadership in their early years, has become a virtual chamber of horrors for Palestinians.

Paradise Lost

It began almost immediately after the liberation, when Fatah headquarters in Jabriyah was torched and Kuwaiti army officials stormed the home of Ali Hassan, a local Muslim leader and brother of Hani Hassan. They shot him in the leg and ribs. Palestinian sources say 15 of Hassan’s young Palestinian supporters were arrested and have not been seen since.

Kuwaitis in civilian dress also raided the home of Abu Iyad, Arafat’s second-in-command, who had been murdered by a bodyguard a few days before the war. His wife tearfully confided to a family friend that Abu Iyad had always predicted that no good would come of the Palestinians staking their future in Kuwait, that “everything you build in Kuwait as a second home, you will lose.”

“I lost my job, I lost my bank account, I lost everything,” said a young Palestinian businessman in Kuwait city. “And things are getting worse. Last night with my friend, 10 soldiers came to his house at 3 a.m. and tried to rape his wife. They stole his passport, they stole his money and his daughter, 3 years old, they beat her hands with a rifle until they were broken. I don’t know why they are doing this.”

Adnan Ahmed Said, general manager of the Sheraton Hotel in Kuwait city, said Kuwait for the Palestinians was the next best place to Palestine. “I came here 34 years ago,” he said, adding that he since has married and raised his sons and daughter in Kuwait, “so we are living in peace. But . . . we are not forgetting from where we came. Our small son, you ask him to draw the line of Palestine, and immediately he will make it on the floor, even city by city, and he will say, ‘Remember that our grandfather was living in that area.’ ”

Many Kuwaitis say it was that sense of “otherness” that kept the Arab communities, Kuwaiti and Palestinian, living in isolation--even in the decades before the war. It also prepared the ground for the deep divisions that seemed to spring to life with the invasion by Iraq and its aftermath.

Long before the Kuwaitis were educated and capable of taking on management and technical positions, Palestinians arrived and did the work for them, laboring long hours and achieving mastery of the jobs and businesses, said Suleiman Mutawa, former Kuwaiti planning minister and a senior oil executive in Kuwait for years.

Still, he added, “as a community which came along from a string of villages in Palestine, they clung together, they did not marry Kuwaitis, their savings were not spent on things in Kuwait and, because they had no country to go back to, the Kuwaiti began having some sort of nightmare called ‘The Palestinian’: How do I get rid of him?”

Since Kuwait’s liberation, an estimated 2,000 Palestinians have been detained by Kuwaiti authorities; human rights groups say dozens have been tortured and at least two have been sentenced to death for alleged collaboration with the Iraqis during the occupation, although that penalty was later commuted to life imprisonment.

Most Palestinians insist they were victims of the occupation, like the Kuwaitis. Many Palestinians did continue to work during the occupation in violation of a strike ordered by the Kuwaiti resistance. This irked the Kuwaitis, on the one hand, but on the other kept vital medical, banking and public works facilities operating.

Hard Times in Kuwait

An estimated 400 members of the Iraqi-backed Palestinian group, the Arab Liberation Front, arrived with Iraqi forces. They were joined later by 400 militiamen of PLO executive committee member Abul Abbas’ Palestine Liberation Front to “intimidate and control” local Palestinians and push them to take a pro-Iraqi stand, said Shafeek Ghabra, a Palestinian political science professor at Kuwait University.

Several hundred Palestinian civilians in Kuwait were issued weapons and ID cards stating they were members of the Iraqi army, he said. They were allowed to travel the country freely, avoided lines for bread and gas and were paid 105-dinar-a-month stipends.

U.S. investigators say there is also “credible circumstantial evidence” that some Palestinians kidnaped Kuwaiti women and, with their captives, ran a brothel for Iraqi soldiers.

But Palestinians in Kuwait and Tunis say the Fatah leadership in Kuwait city refused to obey instructions for organizing pro-Iraq demonstrations; as a result, the Fatah leader in Kuwait, Rafik Qiblawi, was assassinated Jan. 18.

“It’s very bad days for the Palestinians here in Kuwait,” sighed a young Palestinian surgeon from the West Bank who worked throughout the occupation, treating Kuwaitis injured by the Iraqis. As of May, he had still not been paid, although the emir of Kuwait pledged to pay Kuwaitis all back wages lost since the invasion. “They are believing that we supported the occupation, as if we have occupied their land,” he said.

It was Kuwait’s largest Palestinian neighborhood, Hawalli, that sprang back to life first after the occupation. Salim Saleh Khass’ restaurant on Hawalli’s main street, in fact, never closed, cheerfully offering foodstuffs hauled from Basra throughout the occupation.

“Why I like Kuwait?” Khass asked. “Because I came from Jerusalem, poor man. I came here, I take in one month 300 robiya, and after two months 500 robiya and after six months, I take 1,000 robiya, and after five years I open four restaurants, and every month I put in my pocket $10,000!”

He pauses to allow these pronouncements to sink in. “I have one brother go to university five years, and I have another brother go to university in the U.S.A. You know how much this cost? Maybe $100,000. This money from where? From Kuwait. . . . Because of all this, I like Kuwait. I want to die in Kuwait.”

Outside of Khass’ restaurant, many Kuwaiti Palestinians live in a state of perpetual twilight--between the Kuwait that was and whatever it is that will be left when it is over, if it is ever over. Few have returned to work. Many young men say they stay indoors to avoid encounters with police.

The PLO headquarters on a small side street is a virtual fortress, its doors and windows covered with iron bars. Young men with anxious eyes peer out from between the bars when someone knocks at the door, which they seldom open.

Even in the quiet, post-midnight hours, a man’s thin silhouette looms out of the soft yellow light bathing the front window. There is a gun in his hand.

The Palestinian Population

The 1990-91 Persian Gulf crisis, Palestinians say, has created as catastrophic a diaspora for their people as the 1948 creation of Israel. Below is the rough geographic distribution of the Palestinians before the war. Estimates of their present locations are difficult to obtain. Jordan: 1,357,167 West Bank: 1,040,000 Israel: 730,664 Gaza Strip: 596,464 Lebanon: 451,297 Kuwait: 378,083 United States, Europe, Latin America: 368,281 Syria: 281,923 Saudi Arabia: 169,373 Egypt: 67,749 Other Gulf states: 62,285 Iraq: 28,410 Libya: 22,946 Source: Palestinian Academic Society for the Study of International Affairs, East Jerusalem.