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It's difficult to understand how President Clinton could pledge another $400 million of our tax money to the corrupt Palestinian Authority.

While we agree with Clinton that peace will never come to the Mideast until the average Palestinian sees some economic rewards, the U.S. dole provides no such guarantees.

Just last weekend the British press reported that $20 million in British aid, which had been earmarked for housing projects in the West Bank and Gaza, was diverted to build luxury flats for supporters of Yasser Arafat.

When administration officials were asked this week about this misuse of funds, they said that is not a concern since U.S. money bypasses Arafat's government and goes directly to contractors and private groups involved in development.

But that answer is not good enough, and Congress should not accept it.

Before Congress grants any additional funds to the Palestinians, it needs to establish a means of checking how each penny is used. Congress must require that the use of the money be monitored, and that regular reports are submitted.

How can the administration and Congress forget that in 1997 a secret audit performed by the Palestinian Authority on its own books found that $323 million has been wasted, misused or stolen?

If the audit and the British press reports weren't enough to give the administration and Congress concern, how about Arafat's continual insistence that he will proclaim a Palestinian state in May? Despite an agreement to begin final-status talks with Israel now, Arafat used his U.S. visit this week to again stake his claim on half of Jerusalem.

Maybe we have to learn to live with such rhetoric. We have no choice but to deal with Arafat, warts and all. But we don't have to take the chance that our tax dollars will be squandered by him.

The Palestinian people need food, jobs and decent housing. And we need to make sure our appropriations go to help them and not Arafat's corrupt allies.