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JERUSALEM — When Yasser Arafat greeted Israeli television viewers Saturday night with the Hebrew words "Shanah Tovah" (Happy New Year), it was clear the Israeli-Palestinian negotiations, interminably drawn out and marked by crises, were coming to a successful conclusion.

Sure enough, the next day, after one last mini-crisis for good measure and as the final hours of the Jewish year 5755 ebbed away, Israeli and Palestinian officials affixed their initials to the complex 400-page interim agreement.

Palestine Liberation Organization leader Arafat and Israeli Foreign Minister Shimon Peres looked on, beaming.

The two had worked, fought, screamed, and wheeled and dealed at the Egyptian Red Sea resort of Taba for some 80 hours during eight straight days and nights of negotiations, putting what were euphemistically called "the finishing touches" to the mammoth document that has been evolving in quiet backroom negotiations for the better part of a year.

For many Israelis — not only those opposed to the peace process on political or religious grounds — Arafat's "Shanah Tovah" elicited distinctly mixed feelings, however.

After all, this was the man who not that long ago issued orders that spelled death and maiming for innocent men, women and children, in Israel and abroad.

Arafat, too, had been under attack in Israel, and especially in the halls of Congress, for his warlike pronouncements to Palestinian audiences in recent speeches.

Once put into effect, though, the interim agreement he helped hammer out will extend Palestinian self-rule to most of the people and much of the territory of the West Bank.

The agreement will indeed "constitute," in the words of the Israeli government, "a new and important stage in the transition from conflict to reconciliation."

But Arafat clearly had been at pains during the elongated talks to project a conciliatory image to Israelis and diaspora Jews while simultaneously fighting hard to secure the best deal he could for his people.

On the other side, Prime Minister Yitzhak Rabin, aware of the heart-searching hesitations that strike even the most ardent enthusiasts of the peace process, emphasized a "key test" for the long-term future will be the Palestinians' compliance with a provision in the accord that requires them to revoke those articles in the Palestinian Covenant that call for the destruction of Israel.

The revocation of the offending clauses is to take place within two months of the election of a new 82-member Palestinian Council, expected to occur in April, another key feature of the accord.

Reading between the lines, the new agreement advanced prospects for an eventual Palestinian state in the West Bank and Gaza Strip — even though, formally, the Israeli government still opposes such an outcome.

Rabin, in an important statement timed to coincide with the new agreement this week, said he opposes Palestinian statehood "now – and I stress the word `now.'"

"In the future," he added pointedly, "many options can be examined."

For now, the interim agreement — arrived at more than a year behind the original target date set in the 1993 Declaration of Principles — induced yet more delays in the peace process.

The initial Israel Defense Force redeployments, to be completed within six months, covered only about a quarter of the area of the West Bank.

But the agreement prescribed "further redeployments" that will occur in a protracted schedule during the following 18 months.

Before the "finishing touches" marathon at Taba, Egypt, it was hoped that the initial IDF redeployment from major Palestinian towns could be completed by year's end — a move that would allow Palestinian elections to be held by January at the latest.

But that scenario was built upon the premise that Hebron would be the sole West Bank population center where the IDF would not redeploy because of the Jewish settlement presence in the town's center.

As a result of the Taba negotiations, however, security for Hebron will be handed over to the Palestinian Authority, with the IDF retaining direct control only of that area that connects Kiryat Arba, the large Jewish settlement just outside Hebron, to the enclaves of Jewish settlement inside the town.

Rabin and Peres, in an effort to provide security for the area's settlers, decided to construct a major bypass road to enable the Jewish population in Hebron and Kiryat Arba to drive to Jerusalem without passing through built-up Palestinian areas.

Construction of that road is expected to take six months — and that six-month period is now the new, delayed time frame during which the interim agreement will be implemented.

As a result, Israel's redeployment from the major Palestinian population centers in the West Bank will not be completed until March.

The Palestinian elections, therefore, will not take place until late April — or, as the agreement stipulates, 22 days after the redeployment is completed.

Before those elections are held, of course, the winter months loom ahead, gray and threatening, fraught with the menace of violence. Hebron and Kiryat Arba contain some of the most hardline Jewish opponents to the accord.

Settler violence, along with acts of terrorism inside Israel by Palestinian extremists, could destroy the agreement at any stage of its extended period of implementation.

And on the Palestinian side, Islamic Jihad activists labeled the agreement an act of shame. And they branded the city's mayor, Mustafa Natshe, a traitor for going along with it.

There are some Jews who use that same label for Rabin. The precariousness of his position, in fact, was graphically illustrated this week by his reluctance to submit the agreement to the Knesset for approval before he was to leave for the signing ceremony yesterday in Washington, D.C.

Ultimately, he did offer it to Israel's legislators and despite his government's concern about a potential failure to come up with the required votes to support the agreement, the Knesset approved the pact.

As for the Palestinians, negotiator Nabil Sha'ath said this week: "There will be serious implementation problems but we shall have to overcome them."

It was a succinct and precise prognosis, one that well depicts the complex period that lies ahead for both sides.