JERUSALEM — Had all gone according to plan, Israel would have heeded American demands and retreated this past weekend from the deepest incursion into Palestinian territory in more than 13 months of violence.

But following the deaths of five Israelis Sunday — four of them women who just happened to be in the wrong Hadera intersection when Islamic Jihad gunmen in an SUV sprayed them with M-16 bullets — Israel’s troops have stayed put in all but two of five West Bank towns.

Now the government is weighing the interim results of the massive military operation it has mounted: the invasion of seven villages in retaliation for the Oct. 17 assassination of Tourism Minister Rehavam Ze’evi

The balance is complex, informed observers say, with both pros and cons on the balance sheet.

Israel Defense Force troops and tanks pulled back from Bethlehem and neighboring Beit Jala, just south of Jerusalem, overnight Sunday, after a day in which Palestinians desisted from shooting at the nearby neighborhood of Gilo.

But Israel’s continued defiance of American demands that it pull out of all the Palestinian cities — the others are Ramallah, Kalkilya, Jenin, Tulkarm and Nablus, all in the West Bank north of Jerusalem — plainly grated on the Bush administration.

The three members of the inner security cabinet, Prime Minister Ariel Sharon, Foreign Minister Shimon Peres and Defense Minister Binyamin Ben-Eliezer, presumably hoped that withdrawing from the Christian holy city of Bethlehem would alleviate some of the criticism Israel’s armored incursions was stirring abroad.

But TV footage Monday in many Western countries of the destruction the IDF had wrought in the two towns and adjacent refugee camps did little to relieve Israel’s image problem.

Indeed, there was speculation here that a tentative decision by Sharon not to attend the United Jewish Communities’ General Assembly in Washington Nov. 11 was occasioned by Israeli concerns that he might not be invited to the White House. Or that he might even find himself in a confrontation with President Bush, especially if Israeli troops have not fully withdrawn by then.

Both the media coverage abroad — focusing on the 40 Palestinians, many of them civilians, killed during the incursions — and the public tiff with the Bush team are strikes on the balance sheet of the military operation. Certainly the Palestinians were doing their utmost to focus attention on the feuding between Washington and Jerusalem.

But some observers here suggested the feud was not as bad as portrayed. For one thing, after the initial heated reaction, the language used in American statements was relatively restrained. For another, the spat was confined to words, with no hint of punitive action. And for a third, those observers say, Israel was demonstrating to the Palestinians and to the wider region that it has the strength and guts to stand up to Washington when its vital interests are at stake.

In addition, the unrest may have stirred the beginnings of real diplomatic activity. The longer the troops stay inside Palestinian-ruled areas, the more pressure grows inside the Labor Party to leave the government. Reflecting those pressures — or perhaps heading them off — Peres let it be known midweek he is drafting a new peace plan to get the diplomatic process moving again, and that he wants to meet with Palestinian Authority President Yasser Arafat.

The plan, reportedly, is the Labor alternative to the Likud approach Sharon has already developed.

According to a report in the Israeli daily Ma’ariv, the plan calls on Israel to withdraw completely from the Gaza Strip, dismantling settlements where about 7,000 Israelis live amid a hostile Palestinian population.

Peres also envisions a Palestinian state that would be “political, not military,” and the deferment of the status of Jerusalem for a period of years.

Sharon, through his spokesman Ra’anan Gissin, said he would permit a meeting if it would help “in any way bring about the cessation of hostilities,” the New York Times reported. But, Gissin added, “I think a photo opportunity, even Peres would not go for.”

Even Sharon had spoken positively of a Palestinian state just days before Ze’evi was killed. The assassination, for which the Palestinian Front for the Liberation of Palestine claimed responsibility, effectively ended a string of minor but positive steps between Israel and the Palestinian Authority, plunging the region back into violence.

Indeed, some pundits speculated that because the guidelines will inevitably contain elements Sharon opposes, the Peres plan might hasten the downfall of the unity government.

Until Peres releases his plan, however, Israelis were left debating whether the IDF operation really had served vital national interests.

Israeli officials explained last week that the incursions aimed to arrest or kill terrorists and to prevent or pre-empt planned attacks.

They reiterated that logic Wednesday, when forces killed two Palestinian militants — one in Hebron, the other in Tulkarm — suspected of plotting suicide attacks, according to the Associated Press.

According to the army, Jamil Jadallah had links to several attacks carried out by Hamas, including the June Tel Aviv disco bombing. He had escaped from Palestinian jails four times since he was convicted of killing two Israelis in 1998, it said.

Jadallah was targeted in Hebron by a helicopter-fired rocket.

In Tulkarm, an Israeli tank fired on Abdullah Jaroshi (also believed to be a Hamas member) as he got out of his car, the Associated Press reported. The army refused to comment on the matter.

Including the six arrested Wednesday in the West Bank, military sources say at least 50 terrorists and suspected terrorists have been arrested, and some 20 killed in encounters with elite units. IDF officials initially claimed members of the PFLP involved in the Ze’evi murder were apprehended, though later claims contradicted that. In any case, the two men believed to have actually carried out the murder remain at large.

But the two drive-by terror shootings Sunday — the one in Hadera, which also injured dozens, and the other that killed a soldier — undercut the assertion that IDF occupation of Palestinian cities is effective in blocking assaults. The killers in the two attacks came from Tulkarm and Jenin.

The first killing was claimed by Arafat’s Fatah faction, the second by Islamic Jihad.

The claims reflected widespread resistance to Arafat’s public orders to various Palestinian military, paramilitary and opposition factions that it was in the Palestinians’ national interest to observe a cease-fire. Arafat did, however, give precisely the opposite message to trade unionists in Gaza, reportedly calling on the Palestinians “to continue fighting, fighting, determinedly and forcefully.”

Arafat’s cease-fire call could be seen as a success for the Israeli operation, especially if the cease-fire does take hold at least on some of the fronts. Israel says its troops will withdraw from the other cities one by one when each is quiet.

But Arafat repeatedly has spurned Israel’s demand to hand over Ze’evi’s killers. Israel has received no real backing from the United States or the rest of the international community for the demand, which many see as an unrealistic stumbling block to the diplomatic process.

At best, Israel may make do with a proposed international monitoring mechanism — details of which are still vague — designed to ensure that terrorists arrested by the Palestinian Authority do not shortly walk out the other side of a “revolving door.”

Israeli sources say arrests Arafat has made — and trumpeted to the media — are mostly of PFLP “pensioners” who long ago cease being active members of the guerrilla group. Of those on a Most Wanted list Israel submitted some weeks ago, almost all remain free, though at least two have met their deaths in violent circumstances believed to be of Israel’s doing.

Politically, at least, the operation in the West Bank seems to have benefited Sharon. Its scope seems to have assuaged Ze’evi’s National Union-Yisrael Beiteinu faction, which has indefinitely deferred an earlier decision to quit the government.

On Tuesday, Knesset member Benny Elon took over as Ze’evi’s replacement in the tourism ministry. For Sharon, fighting to hold his coalition together and ward off incessant criticism from his Likud Party rival Benjamin Netanyahu, that is a gratifying development.

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