Above the door of the midtown Manhattan building where Yasser Arafat spoke to national Jewish leaders Monday are the Hebrew words B'nai Zion, or children of Israel.

When Rabbi Doug Kahn walked into the building of the Zionist organization Sunday, it struck him that the chair of the Palestinian Liberation Organization would walk through that very same door the next day.

"It seemed so extraordinarily powerful," said Kahn, executive director of the S.F.-based Jewish Community Relations Council. Three years ago, he said, it would have seemed unimaginable that "one would be sitting at a meeting of national Jewish organizations at an institution titled B'nai Zion, and that Yasser Arafat would be walking in the room to speak."

That, however, is just what happened this week, as Arafat delivered a rambling speech to more than 100 members of the executive committee of the National Jewish Community Relations Advisory Council.

The speech to the umbrella body of local Jewish communal relations councils and national agencies came one day after Arafat spoke at the U.N. General Assembly during its 50th anniversary celebrations (and, incidentally, before New York Mayor Rudolph Giuliani expelled Arafat from a concert for world leaders, sparking protests from the White House).

The man who had last appeared at the world body in New York 21 years ago with an olive branch and a gun holster this week told the world he had come "with a heart filled with love and peace, with the olive branch hoisted over the peace of the brave."

For some, the meeting was a reunion. A top-level NJCRAC delegation met with Arafat at his Gaza beachfront office a year ago. But for others, this historic meeting, the first between Arafat and Jews in the United States, was unthinkable.

The Zionist Organization of America, for example, said in a statement, that "no Jewish groups should meet with Arafat until he retracts his jihad [holy war] remarks." The Union of Orthodox Jewish Congregations of America, a member of NJCRAC, also issued a statement of protest and boycotted the meeting.

It charged that the NJCRAC provided Arafat "with a public forum in which to present the PLO's position and his own version of events."

Also conspicuously absent at the NJCRAC meeting were members of larger Jewish organizations, including the American Jewish Committee, the American Jewish Congress and the Anti-Defamation League.

The ADL ordinarily provides space for the NJCRAC executive meetings but declined to do so this week for security reasons, said Abraham Foxman, ADL's national director.

Sources indicate there were concerns that the NJCRAC did not consult adequately with its members about the meeting.

But Martin Raffel, the NJCRAC's associate executive vice chairman, defended the meeting. "Once the PLO became Israel's peace partners, it didn't occur to us we shouldn't meet with them," he said.

Kahn, too, stressed that in meeting with Arafat, American Jews are simply following Israel's lead.

"If Israel is meeting Yasser Arafat, whose terrorist record is painfully and well-known to every Israeli, then there is suddenly nothing exceptional about American Jewry meeting with him," he said.

Kahn — who attended the meeting with Jackie Berman of the South Bay JCRC — described Monday as a day of anticipation and some uncertainty. When Arafat entered the room, "He was received in the way someone who is world famous would be," Kahn said, "with people craning their necks and kind of leaning forward to see him come in."

NJCRAC chair Lynn Lyss introduced him by saying that the peace process "does not require us to forget the past," but "does require us not to be prisoners of the past."

Arafat also acknowledged the past in his opening remarks, alluding to protesters outside shouting, "You are a murderer."

"We can understand it," he said, making a point of setting aside his prepared text and "speaking from my heart."

"We know it is not easy to overcome all these dramatic events suddenly after two agreements in Washington and one in Cairo," he said, referring to the agreements on Palestinian self-rule reached between Israel and the PLO over the past two years.

But "we are not only cousins, we are peace partners," he said. "To accept or not accept, it's a fact."

After remarks highlighting the common land, history and suffering of Jews and Palestinians, Arafat answered pointed questions from the audience about his repeated use of the term jihad in speeches to Palestinians and about the clauses in the PLO's Palestine National Covenant that call for Israel's destruction.

"You have to understand our terminology as I'm understanding Jewish terminology," Arafat said about his use of the term "jihad," which has angered and unnerved many American Jews.

Repeating previous explanations, Arafat said he was referring to a second type of jihad that follows the more traditional jihad on the battlefield.

"This is the grand jihad to build a state," he said.

He also said the offensive clause in the covenant was caduc, using the French term for "null and void."

When pressed, he said he would "definitely" convene the Palestine National Council after Palestinian elections to repeal the clause, "if Israel is ready to let" all the members come to vote for the repeal.

Under the latest agreement on extending self-rule in the West Bank, the Palestinians are scheduled to hold elections in January.

Arafat wryly observed that he envied Prime Minister Yitzhak Rabin for having to contend with only one united opposition to his peace program.

"I have many," he said. "We face Arab opposition, Palestinian opposition, Islamic opposition, even Christian opposition."

In response to Lyss' call to encourage an end to the Arab boycott of Israel, Arafat called on Israel to end its economic boycott of the Palestinians when it imposes a closure between Gaza and Israel, costing $6 million a day.

"It's a disaster for us," he said. "In spite of all the obstacles, we insist on continuing."

Such answers bothered some. "He gave the kinds of slippery answers that he has been known for for decades," Kahn said, adding that he would like to have seen Arafat state unequivocally that he would work to end the Arab boycott.

"On the other hand there were these glimmers of light when he made it clear that there was no alternative" to pursuing peace.

Arafat's answers to questions posed at the NJCRAC meeting were similar to the explanations offered at a private meeting Tuesday with a delegation of the Conference of Presidents of Major American Jewish Organizations, according to one source present.

One difference was Arafat's statement Tuesday that he foresaw a Palestinian confederation of Jordan.

Arafat's appearance before the NJCRAC seemed to satisfy those present, many of whom support the peace process and were predisposed to be sympathetic to him.

"The specifics of what Arafat said were less important than the fact that he appeared before the organization that represents the grass-roots of American Jewry," said Robert Lifton, a vice chairman of the NJCRAC executive board.

"It is one more example of grassroots support for the peace process."