Should U.S. provide money to Palestinian Authority-YES.

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Congress recently renewed the Middle East Peace Facilitation Act (MEPFA), legislation that allows the U.S. government to provide financial aid to Yasser Arafat and the Palestinian Authority (P.A.) in Gaza and the West Bank. I believe this is a correct decision, for these reasons:

*America needs an Arab-Israeli peace.

Perhaps more than ever, the two interrelated objectives of U.S. policy in the Middle East — maintaining regional stability and ensuring the availability of oil at affordable prices — are now challenged. Iraq, Iran and Syria support terrorism and actively pursue the development of nonconventional weaponry. They also use the conflict between Israel and the Palestinians to stir up emotions and unleash forces to overturn existing governments, and so to extend their power over the Middle East's oil-rich countries. Settlement of the Arab-Israeli conflict reduces the power of these rogue states.

*Palestinians must benefit from peace.

Israel needs a lasting peace with the Palestinians if it is to make peace with its Arab neighbors, reduce its burdensome responsibilities as an occupier and achieve maximum security. For Arafat to defeat such fundamentalist groups as Hamas and Islamic Jihad, and retain Palestinian support, he must better Palestinians' lives by improving their standard of living. His failure to do so would play directly into the hands of extremists, for hungry, unemployed people are prey for those extremists who declare that peace with Israel is worthless and the struggle should continue without end.

*The need for foreign support.

The P.A. cannot pull itself up by its bootstraps to achieve economic success: poverty, deterioration of infrastructure, unemployment, lack of industry and too few taxable enterprises make this impossible. A visit to Gaza, with its miserable housing, open sewers and terrible living conditions makes obvious the need for massive outside financing to create a base for employment and improved living conditions. Only with these improvements can Palestinians use their business and administrative experience, plus their talents, to build their economy.

*The need for American aid.

Only the United States has the credibility and capability to galvanize international financial support. Without such help, Arafat will be unable to improve Palestinian life in Gaza and the West Bank, leading to an increased role for the extremist groups. A continuing cycle of poverty and extremist terror creates more threats to Israel's security and places more strain on its economy, forcing Washington to carry more of the burden in the Middle East.

The $500 million of total American aid committed to the Palestinians over five years represents just 23 percent of the total international commitment. This is a small price to pay to avoid the incomparably more costly and potentially dangerous consequences of a failed peace between Israel and the Palestinians.

Critics counter these arguments, saying Arafat has not lived up to commitments made in written agreements with Israel and should be held more accountable for his actions. They want aid to Arafat conditioned on his future behavior. While this appears reasonable, closer analysis reveals that it is not appropriate at this time. Conditions needlessly slow down the peace process, are impossible for Arafat to satisfy at present or are unnecessary for the protection of Israeli or U.S. interests. Let's look at the particulars:

*Revocation of the PLO Coven-ant.

The PLO must revoke its odious covenant. At present, however, it is so divided that Arafat cannot pull together a quorum of the PLO that would revoke the offensive elements. The recently signed Taba accord requires that the covenant be revoked within two months after Palestinian elections, set for Jan. 20. This is a realistic requirement; Congress should not add to it.

*Rejection of Hamas.

Arafat has in fact rejected Hamas, and the best proof is already at hand in his public condemnation of all the recent suicide bombings in Tel Aviv and Jerusalem. More important, he shows that he at last understands that Hamas is as much a challenge to this authority as it is to Israel. Accordingly, he has joined with the Israeli security forces to defeat the terrorists.

*Cutting out the anti-Israel rhetoric.

Opponents of the peace process publicized transcripts of a taped speech delivered by Arafat to Palestinians on June 19 in which Arafat proclaimed, "We will go on with the jihad [holy war], a long jihad, a difficult jihad, an exhausting jihad, martyrs, battles." Whether Arafat is telling the truth when he claims that he was not using jihad here to refer to a military conflict is not important; what counts is the reality of his actions. And what he is doing is helping Israel defeat the terrorist groups. To tie aid to the meaning of his ambiguous statements is to get caught up in irrelevancy.

*Accountability and transparency.

U.S. officials administering funds already consider themselves bound by U.S. law and have consistently refused to provide funds unless they are disbursed in ways that satisfy accountability and transparency. In connection with some of the major projects in Gaza, Arafat explicitly agreed that the donors can pay funds directly to the companies chosen to carry out the projects, completely bypassing Arafat and his colleagues. It is only when funds have come from sources that do not insist on accountability and transparency (including some Arab states) that Arafat has used the money for political purposes unconnected with economic development.

Further, those Americans sincerely troubled by Arafat's words and his past inaction can take heart: Aid funds are to be paid out over a period of five years so the United States have every opportunity to test Arafat's promises against his performance.