In front of Arafat’s Ramallah headquarters on Thursday, Palestinian teenagers climbed atop a bus shelter to attach a red, black, white and green Palestinian flag in the sight of the Israelis. It was eerily reminiscent of scenes during the first intifada in the late ’80s, when the Palestinian Authority (PA) was not yet around and the then-banned flags were one of the few ways to express Palestinians’ aspiration to statehood. Now, with Arafat surrounded, and important symbols such as the radio studios and the Gaza airport in rubble, it looks as if the Palestinian dreams of sovereignty have literally been set back by decades.

Just how much the PA’s hold has crumbled became clear earlier this week, on Monday, when Israeli tanks and bulldozers blocked off the entrance to the house of Mahmoud Jallad, mayor of the West Bank city of Tulkarm. “The soldiers knocked on the door at 4 in the morning,” Jallad was able to tell reporters over the telephone. His house was occupied and he and his family were placed under house arrest. “They made me, my wife and my two children stand outside in the cold for three hours while they searched our house,” he said. It was the first time the Israeli army had reoccupied an entire Palestinian city. Mayor Jallad had an explanation for why they took over his house: “To show all of Tulkarm, all Palestinians and especially President Arafat that they can do what they want.” The army withdrew the following morning, but the message had been sent.

The Israelis move at will through areas that were supposedly handed over to the PA under the Oslo peace agreements. There they arrest or kill people on their wanted list, as they did in Nablus on Wednesday when four members of the militant Islamic group Hamas died when troops attacked a presumed bomb-making facility. Late in the evening on Thursday, Israeli forces undertook another targeted assassination. Helicopter gunships fired two missiles into the car of Bakar Hamdan, a senior Hamas official in the Southern Gaza strip, killing him and wounding two others. A Hamas response to both incidents is inevitable, which means the fundamentalist movement’s cease-fire agreement with the PA is now definitively scrapped. Israel’s army and its political decision-makers could not have made it any clearer that in their view the PA has indeed become irrelevant.

What is perhaps most surprising about the unprecedented Israeli assault on the Palestinian Authority is how completely the United States has gone along with it. While the international community, including the United States, issued howls of protest over the first Israeli incursions into Palestinian territory last year, now whole cities can be reoccupied for more than a day with full American support. On Thursday, White House spokesman Ari Fleischer said President Bush “understands the reason that Israel has taken the action that it takes, and it is up to Chairman Arafat to demonstrate the leadership to combat terrorism.”

But the Israeli assaults have brought the PA to the brink of extinction, destroying any hope that it would be able to control militants. In fact, with the PA pushed to the side, support for the militants is growing among an increasingly enraged and desperate population. After the Israeli action in Nablus, thousands of furious residents stormed the local prison and the governor’s compound. They broke through the metal fence and attempted to free anti-Israeli militants who had been detained by the PA in the past weeks. “Prisons are not for Hamas,” the demonstrators chanted. One of them was killed in the confrontation with the Palestinian police.

In the wake of the Israeli raid that killed four of its members, Hamas immediately pledged a resumption of the devastating attacks inside Israel that had presumably been suspended since mid-December. The movement promised a “fierce war” against “Zionist gangs,” using all the means at its disposal.

Just hours later, in the already hard-hit center of Jerusalem, a Palestinian gunman sprayed Israeli passersby with bullets, killing two and wounding dozens. Israelis have almost become accustomed to these scenes, with 10 fatalities from shootings the week before. As usual, the Israeli government held the PA and Arafat directly responsible. A spokesman called the attack “a continuation of the terrorist campaign against Israeli civilians, women and children, committed by terrorist organizations with the passive or active encouragement of the Palestinian Authority.” Many speculated that the shooting would set the stage for further Israeli action against the PA, which would then trigger more attacks against Israel.

Both Israel Prime Minister Ariel Sharon and Yasser Arafat seem to have chosen to engage in permanent, low-level confrontation rather than to make painful political concessions. Right now, Sharon and his right-wing followers have the upper hand in their attempt to beat down the Palestinians’ national aspirations. Despite Palestinians’ criticism of Arafat, they still regard him as Mr. Palestine, the living symbol of their struggle. By showing he is impotent in the face of Israel’s might, Sharon hopes to dash the Palestinians’ hopes of statehood.

The immediate effect, however, is that many Palestinians are turning away from Arafat’s tactics and are embracing those of his more militant opponents. Many Palestinians linked the Jerusalem attack with the events earlier that day in Nablus, even though Fatah’s Al-Aqsa Martyrs Brigades, not Hamas, claimed responsibility for the attack. “I don’t like this,” a Jerusalem Palestinian who himself frequently moves through the city center said after the attack, “but the Israelis have to understand that if they do what they did in Nablus, they can expect to be killed themselves. That is the only way that we are going to get them to stop. Arafat does not offer an alternative.”

In Tulkarm earlier in the week, politicians and ordinary people who could not understand why the PA had not resisted the Israeli incursion more forcefully expressed similar sentiments. While machine-gun fire echoed through the narrow streets of the Tulkarm refugee camp at the edge of the city, a group of Palestinian militants shouted their defiance at Israeli tanks at the camp’s perimeter. “If you are a man you will come down from your tank and we’ll teach you a lesson,” one Palestinian, who would only give his name as Khaled, shouted derisively at the Israelis. Most of the militants on Israel’s wanted list had escaped to the camp, a warren of narrow streets and jerry-built houses, in the early hours of the incursion. “We will fight the tanks, if necessary with our bare hands,” said Khaled, “not like the Authority people, who don’t do anything.” The black smoke of burning tires and more machine-gun fire attested to the determination of the resistance. In the end, the Israelis vindicated the militants’ stance. The army left the camp alone, saying that it would have absorbed casualties had the troops gone in. The failure of the army to enter the camp and arrest the wanted militants also proved that the reoccupation was largely an exercise in symbolism.

Not far from the camp, the villa of Hassan Khreisheh, a member of the Palestinian Legislative Council for Tulkarm, afforded a view of the surrounding hills, dotted with Israeli tanks. “Of course the PA cannot fight tanks with machine guns. We are powerless,” he said. Khreisheh, though belonging to Arafat’s Fatah movement, blames the Palestinian leader for his people’s troubles. “We did not build any institutions; the PA is a one-man show,” he said. The lawmaker signed a petition in 1999, condemning undemocratic practices and corruption in the PA. He said Arafat’s men threatened him because of it. “Many people are against Arafat, against all his concessions to the Israelis, against the way he runs the PA. But if we are going to change our leaders it should be through democratic means, not because of Israeli pressure.”

On Monday, the only oasis of power for the PA in Tulkarm was the governor’s residence. Ezzedin Sharif, clearly a Fatah man to the bone, put a brave face on the fact that the Israelis had left him alone. “I am the direct representative of President Arafat. If they move against me, it is like moving against him.” He seemed completely bewildered by the developments in his city. “The Israelis say this is a center of terrorism, but in the six years since I became governor, I didn’t see any terrorists,” he maintained. “Tulkarm was even the favorite town for Israeli weekend shoppers before the intifada. Would they have come if there were terrorists here?” Outside, one of his armed guards looked about nervously. “An Israeli jeep comes by every 30 minutes with a megaphone announcing a curfew. We’d rather not run into them.”

In the event, the revelers at Nina Kardashova’s bat mitzvah — the coming-of-age celebration for Jewish girls — pummeled the Palestinian attacker with chairs and bottles. Though he shot and killed six of them, they overwhelmed him and dragged him out of the party hall by his legs. Fearing that he was wearing an explosives belt, a weapon that in the past suicide bombers have employed to deadly effect, the police shot him dead.

The three-week period of relative calm over Christmas and New Year’s had already broken over the previous days. The lull in the fighting between Israelis and Palestinians was widely seen as no more than temporary — and it was treated as such by the international community, which did nothing to capitalize on the quiet while it lasted. Now, the cycle of violence has resumed, with at least three Palestinians dead in the aftermath of Thursday’s attack and very few new ideas on how to bring the crisis to an end.

Neither side — not the boxed-in Arafat nor the hardened Sharon — seems to have the room nor the inclination to move toward compromise on their own. If there’s any hope of checking the spiral of violence, it will have to come from outside the region — presumably, from U.S. involvement.

The shaky three-week truce that started mid-December ended more than a week ago with a deadly attack by militants from the Islamist Hamas movement on an army position inside Israel, in which four soldiers died. Although Palestinians were furious over the Israeli army’s demolition of houses in the Southern Gaza strip, the inevitable Israeli response initially did not inflict Palestinian casualties. Then, on Tuesday, Palestinian militant Raed Karmi died in an explosion in Tulkarm on the West Bank, for which Israel was blamed.

Karmi was a member of Yasser Arafat’s Fatah movement, whose shadowy militant wing, the Al-Aqsa Martyrs Brigades, vowed revenge. The group promptly started by killing four Israelis in the West Bank. Thursday’s deadly assault, however, was the first on civilians inside Israel in more than a month. “There will be more successful attacks that will plant fear in the hearts of the Zionist enemies. Revenge is coming,” the Al-Aqsa Brigades said in a statement afterward.

Ten victims, almost all civilians, seems a heavy price to exact for the death of one militia commander who openly admitted to having killed Israeli civilians.

“The current wave of attacks is not only in retaliation for the assassination of Karmi,” says Palestinian political analyst Ghassan Khatib of the Jerusalem Media and Communication Center. “It is a reaction to nothing improving at all for the Palestinians even though we observed a cease-fire week after week.”

Khatib and many other Palestinians blame the international community, and particularly the United States, for not forcing Israel to make concessions during the period of calm. “How can Arafat convince the people that a truce is the best way to achieve our objectives when he gets nothing in return and when the Israelis still keep him locked up in Ramallah?” asks Khatib.

The standard Israeli response is that the Palestinian Authority (P.A.) is still not doing enough to fight terror. Karmi is a case in point: He was supposed to be under arrest by the P.A. but never saw the inside of a jail. Just a few weeks ago, during the cease-fire, he walked about freely in Tulkarm. Many there knew that it was just a matter of time before the Israelis would get him — they had tried once before and failed. Even if Karmi was not the “ticking bomb” that the Israelis say he was, they had good reason at least to demand his incarceration by the P.A.

The period of calm was also disturbed by the Palestinian Authority’s apparent attempt to smuggle a massive quantity of arms into its territory in the first week of January. The Israelis intercepted the cargo aboard a freighter, the Karine A, in the Red Sea, hundreds of miles outside their territorial waters. Aboard the ship they found, among other weapons, Katyusha rockets and anti-aircraft missiles.

The Israelis say these weapons would have led to an unprecedented escalation had they fallen into Palestinian hands. It proved, according to the government, that the Palestinians were preparing for a continuation of the violence. The rest of the world did not completely share Israel’s indignation, maybe because it did not come as a big surprise that, in a war, people try to acquire arms.

On these issues, though, Israel has a firm ally in the United States. “The whole world knows that the P.A. has to crack down on those elements that perpetuate violence,” says a spokesman for the American embassy in Tel Aviv. He emphasizes that the only way out of the current crisis is an end to the violence, which seems to place the onus on the Palestinians.

The U.S. is eager to help the parties extract themselves from the conflict, goes the official line, but first they have to stop killing each other. “Sure, it can be a person’s view that Israel should have done more to accommodate the Palestinians during the period of relative calm — but even if you believe that, it is no justification for all the killing that we are seeing now,” says the spokesman.

The Bush administration still shows signs of its original reluctance to get too deeply involved in the conflict. While Israel’s new Labor Party leader and defense minister, Benjamin Ben-Eliezer, is calling for a quick return of the U.S. special envoy, Gen. Anthony Zinni, the embassy in Tel Aviv is being cautious. “Zinni has not thrown in the towel,” the spokesman emphasizes, “but when he was here the first time and there was violence, people spoke of the ‘Zinni escalation.’” While Zinni is still expected back in the region, the message seems to be that he may wait for quieter times.

How that quiet is going to be achieved is anybody’s guess. The statements of the Israeli government don’t exactly encourage the Palestinians to lay down their arms in favor of diplomacy. Prime Minister Ariel Sharon earlier this week effectively said there is virtually no chance he’ll ever negotiate with the Palestinians.

“What is there to talk about?” wondered Sharon at a meeting with foreign correspondents. “Arafat rejected Barak’s proposals at Camp David. What Barak offered went much further than what any other Israeli prime minister was willing to offer, and it certainly goes further than what I am willing to offer.”

Publicly, the United States and Israel are still saying that they want to work toward the implementation of the Mitchell Commission recommendations of May 2001, which are supposed to lead to negotiations. The Palestinians are unconvinced. They doubt that the conditions for starting that process will ever be met, or that it will lead anywhere if it ever does start.

Security, not diplomacy, remains Israel’s top priority, as Sharon himself states again and again. “I will fight for peace, but I’m not willing to compromise on the security of the Israeli people,” he said this week. While many Israelis are now starting to wonder what kind of security he has brought since his election victory almost a year ago, in the current climate of violence, the public does not incline toward a softer approach. The army’s deputy chief of staff, Maj. Gen. Moshe Ya’alom, probably gave voice to the current mood when he said on Thursday: “It could be that we will have to return to the territories that we withdrew from in the Oslo accords.”

While most Israelis still seem to support a negotiated settlement, they also back a very tough line toward the Palestinians, commentator Chemi Shalev argued in the Israeli daily newspaper Ma’ariv. That includes support for targeted assassinations, house demolitions and incursions into Palestinian territory. “The public feels that even if the assassination of people like Raed Karmi leads to an escalation, it is still worth it,” writes Shalev.

In this climate of tit-for-tat violence, it is impossible to blame just one side for provoking the other. The Palestinians, though, are convinced that the death of Karmi was a deliberate provocation on the part of the Israelis. “Karmi was a Fatah man,” says political analyst Ghassan Khatib. “They did it to undermine Yasser Arafat, who leans on Fatah in his efforts to impose the cease-fire.”

Certainly the position of the Palestinian leader has become even more precarious recently. His own movement is leading the upsurge in the violence, and other factions are furious with him over the arrest of a prominent militant, Ahmed Sa’adat, the leader of the Popular Front for the Liberation of Palestine. Sa’adat is wanted by Israel for his alleged role in planning the murder of Israeli cabinet minister Rehavam Ze’evi last October. The PFLP has threatened violence against the P.A. if its leader is not released.

Nonetheless, the government of Ariel Sharon continues to blame Arafat and the P.A. directly for every act of violence. “We are going to respond in a manner which will teach the Palestinian Authority a lesson they will not forget,” said an Israeli government spokesman in the aftermath of the Hadera attack. The Israeli media are speculating whether Washington will now break off all high-level contacts with the P.A., as Jerusalem already did last week, although that seems like wishful thinking on Israel’s part.

Despite their misgivings over the U.S. role, the Palestinians still see the Americans as “the only game in town,” as analyst Ghassan Khatib characterizes it. When both sides tire again of the bloodletting, the U.S. should be there to pick up the pieces. But for now, both Israelis and Palestinians have lost all trust in talk and are reaching for their weapons again.