WASHINGTON — U.S. Jewish leaders are hailing Clinton administration demands this week that Palestinian leader Yasser Arafat fight terrorism before Israel revives the Oslo Accords.

In a major policy speech at Washington's National Press Club Wednesday, Secretary of State Madeleine Albright blasted Arafat for failing to fully fight Palestinian terror attacks against Israel — a complaint President Clinton echoed.

U.S. Jewish leaders voiced enthusiasm for the Clinton administration's tough stand on Arafat.

"Secretary Albright correctly identifies the `crisis of confidence' which has disrupted the peace process and now threatens progress previously made through long and difficult negotiations," said Rabbi Eric Yoffie, president of the Reform movement's Union of American Hebrew Congregations.

Added Abraham Foxman, national director of the Anti-Defamation League, "Every which way that one can say that violence has to be renounced, she said it."

Martin Raffel, chairman of the Israel task force of the Jewish Council for Public Affairs, agreed.

"At the end of the day, the carrot to Arafat is that if you take terrorism seriously and you bring your concerns about settlements to the negotiating table, you're going to find the United States sympathetic on that issue," he said.

But until Palestinian attacks on Israel stop, Albright made clear this week, the United States will support Israel's refusal to restart the peace process.

"It is simply not possible to address political issues seriously in a climate of intimidation and terror," she said.

Speaking to reporters on the White House South Lawn immediately afterward, Clinton expressed similar sentiments.

"I know that it's been discouraging for the Palestinian Authority. I know they get frustrated. I know that sometimes Mr. Arafat feels like he's caught in the middle, between his own population and their discontents and frustration, and his frustrations in dealing with the Israeli government," Clinton said.

"But none of that can be an excuse for not maintaining security."

Clinton also urged Arafat to rein in Islamic fundamentalists, according to the Associated Press.

"You cannot have an environment in which people believe that to get what they want is to kill innocent people."

Asked if the Palestinians have lived up to the Oslo Accords, Clinton said, "I could not say that there has been constant, 100 percent effort" to fight terrorism.

Albright had directed the bulk of her hastily arranged policy address at Arafat and his Palestinian Authority.

"There is no place in the peace process for violence or terror, and there is no room for using security cooperation as leverage in a negotiation," said Albright, who because of the crisis in the Middle East changed the focus of her planned address from Asia.

Still, the policy does not signal smooth sailing for Israel. Albright also hinted that if and when Israeli-Palestinian talks resume, the United States would back the Palestinian demand to halt Israeli building in eastern Jerusalem and the West Bank.

"The principle of refraining from unhelpful unilateral acts is central to maintaining mutual confidence," she said.

"It is fair to ask: How can you create a credible environment for negotiation when actions are being taken that seem to predetermine the outcome?"

Albright, who stuck to a prepared text read from a TelePrompTer, issued her challenge to Arafat in at least seven different ways during her half-hour speech.

Sporting a gold pin that many thought looked like a soaring dove, Albright offered to travel to the Middle East later this month to work at accelerated final-status talks if Arafat makes "a 100 percent effort" against terrorism.

Albright suggested that it would be easier for the parties to overcome setbacks and avoid distraction if the Interim Agreement is "married" to accelerated final-status talks.

Israeli Prime Minister Benjamin Netanyahu has suggested jumping right to final-status talks, which are supposed to address the issues of borders, settlements, refugees and Jerusalem.

The peace process has grown increasingly shaky in the wake of last week's suicide bombing in a Jerusalem market that claimed 13 Israeli victims.

Relations between Israel and the Palestinians hit rock bottom as they traded angry rhetoric and cut off virtually all contact.

The attack also provoked Israel to round up more than 150 suspected Islamic militants in areas under its control.

In a potentially dire warning, Israel also threatened to enter the Palestinian self-rule areas to carry out further arrests if Palestinian Authority officials did not do so themselves.

That warning came after Israel imposed a closure on the West Bank and Gaza Strip and halted the payment of tax revenues it regularly transferred to the Palestinian Authority under the peace accords.

Israel also demolished at least six homes that it claimed were illegally built by Palestinians.

Israel had withheld a payment of tax revenues, which Palestinian Finance Minister Mohammed Nashishibi said amounted to $41 million. He charged that Israel was making it impossible for the Palestinian Authority to pay salaries and expenses.

Palestinian officials also said the closure of the territories, which prevents tens of thousands of day laborers from entering Israel, was a "collective punishment" against the Palestinian people and was costing the Palestinian economy millions of dollars daily.

They also charged that the punishment was misdirected, claiming that the bombers, whose remains have not yet been identified, had come from abroad and had nothing to do with the Palestinian people.

Throughout this week, Israeli security forces remained on high alert amid threats by the militant Hamas, which claimed responsibility for the Mahane Yehuda attack, to launch more attacks against Israelis.

Meanwhile, the punitive measures against the Palestinians prompted criticism by European countries and the 22-member Arab League, which said they amounted to "a declaration of war" against the Palestinian Authority.

Like some Palestinian officials, the Arab League also blamed Israeli policies for last week's twin suicide bombings.

Arafat himself insisted the bombers had not come from areas under his control. But Defense Minister Yitzhak Mordechai said the bombers would not have been able to act without help from the terrorist infrastructure operating in areas under Arafat's control.

In the aftermath of the bombings, the Israeli Cabinet this week also took aim at what it described as Arafat's refusal to honor the self-rule accords, particularly its commitment to fight terror.

If Arafat did not clamp down on terrorists and their infrastructure in the territories, Netanyahu told the Cabinet on Sunday, "We will not unilaterally honor our agreements, and the agreement cannot survive."

With the peace process crumbling, Egypt's President Mubarak met in Cairo with Arafat and Foreign Minister David Levy. Jordanian King Hussein invited Arafat to Amman and telephoned Netanyahu to set up a visit of his own to Israel. The king instead later dispatched his brother, Crown Prince Hassan, to Jerusalem.

Ross is scheduled to travel to Israel this weekend for an open-ended mission aimed at restarting security talks in the short term.

His mission was postponed from last week because of the Mahane Yehuda attack, which also wounded 170 people.

Unlike his previous shuttles since the peace process stalemated in March, Ross is believed to be armed this time with some pointed letters from Clinton and Albright aimed at both Israel and the Palestinians.

To Israel, the Clinton administration is expected to indicate its concern over further construction in eastern Jerusalem and the West Bank.

But the administration's main message is to the Palestinians.

"There can be no winks, no double standards, no double meanings and with respect to the imprisonment of terrorists, no revolving doors," Albright said.

"Nor can the level of security cooperation ebb and flow with the ups and downs of negotiations. The Palestinian commitment to fight terror must be constant and absolute."

Furthermore, she said, "there is no moral equivalency between suicide bombers and bulldozers, between killing innocent people and building houses."

House Speaker Newt Gingrich had even sharper words for Arafat in an interview Sunday. "I think there are very few people who believe anything [Arafat] says, and I think he has squandered what was a great opportunity to build general peace in the region."

Congress has recessed until September without extending a law that makes it possible for the Palestinian Authority to receive American aid and maintain offices in the United States.

Albright drew high marks from Jewish officials whom she had briefed during a conference call only hours before her speech.