"Shaul Mofaz, the Israeli military chief of staff, said the self-governing Palestinian Authority is becoming a 'terrorist entity' instead of a peace partner."

The leaks are everywhere.

Arafat and regime are about collapse -- i.e., the money and capabilities provided by the U.S. and Israel to keep the PA going are being cut off if Arafat doesn't shape up!

Arafat may flee to Baghdad or Tunis -- i.e., send him money quickly or he may go back into exile and cause more trouble out rather then in, the region will face even more tensions, and the Israelis will have to deal with other Palestinians far less "flexible" and "pliable" than the man.

Sharon is forming a "national unity government" with none other than Shimon Peres to be the Foreign Minister -- i.e., war preparations are underway should any of the regimes in the region seriously attempt to thwart Israeli designs to keep the Palestinians down and American designs to dominate the region with Israel as Number 1 ally and enforcer.

The Israelis are planning to "reoccupy" some of the "occupied territories" -- i.e., Arafat and "Authority" didn't deliver as promised so they are being pressured one more time, big time, to do as they are told or their services may no longer be needed.

So the leaks are everywhere these days. Even today on Page 1 of The Washington Post right next to the story about the big Seattle earthquake.

But don't be too quick to believe such stories at face value. Many of the stories result from carefully coordinated leaks that start with the politicians themselves; sometimes with intelligence agencies. A very complicated political dance is going on at this time; one interwoven with huge amounts of money, deeply buried secrets, and much historical consequence.

But also don't disbelieve the stories automatically either. In fact in this age of saturation media and instant communications, the politicians use leaks and the media to prepare the way for what indeed might really be coming, thus cushioning the shock and making possible tomorrow what isn't yet quite possible today.

Israeli Army Chief of Staff Shaul Mofaz told Jewish agency activists Wednesday in Jerusalem that Palestinians were stockpiling weapons smuggled in by sea and underground tunnels.

JERUSALEM - Washington Post (1 March, Page 1) -- After five months of violence in the West Bank and Gaza Strip, Israeli military and civilian officials have concluded that the situation is no longer tenable and they will have to do something about it soon. Among options being discussed is the possibility of reoccupying territory controlled by Yasser Arafat's Palestinian Authority, according to Israeli security sources.

"The situation, as it is, is unbearable," said Maj. Gen. Moshe Yaalon, the military deputy chief of staff. "Within a few weeks or months, we will have to decide what to do with it. There is a consensus on that."

The consensus has apparently strengthened in the last several weeks, a period of intensified daily gunfights and grenade and mortar attacks, especially since the Feb. 6 electoral victory of Ariel Sharon, a hard-line former general who campaigned for prime minister on the promise of guaranteeing Israelis' security.

In an exceptionally blunt assessment today, Lt. Gen. Shaul Mofaz, the Israeli military chief of staff, said the self-governing Palestinian Authority is becoming a "terrorist entity" instead of a peace partner. He blamed Arafat and his security aides for orchestrating a month-long escalation of violence against the Jewish state, saying the Palestinian leader had given Islamic militants and his own security personnel a "green light for terror."

In a speech to the governing board of the Jewish Agency for Israel, a pro-immigration organization, Mofaz warned of further deterioration and said the Palestinians were vigorously stockpiling arms and ammunition. In a brief interview, he said the option of retaking Palestinian-controlled areas is "a possible direction," but added: "I'm not sure we'd be happy to do it, especially in built-up areas."

Mofaz said that since the uprising began at the end of September, Palestinians have been responsible for more than 3,600 shooting attacks against Israeli civilians, soldiers and vehicles, and for about 200 roadside bombings. Israel has responded with heavy weaponry; casualties are heavily weighted on the Palestinian side.

Citing the grinding daily conflict that has left 334 Palestinians, 61 Israelis and 13 Israeli Arabs dead since Sept. 29, officials have said that if Arafat did not contain attacks on Israeli soldiers and civilians, Israel might eventually feel compelled to go beyond the economic pressure it has already applied against the Palestinians.

Plans to take back at least some of the territories from which Israeli troops began withdrawing in 1994 have been on the books for several years and are constantly reviewed. In the past few months, the army has undertaken an intensive effort to dust off and reevaluate these plans at the general command, battalion and brigade levels, sources said.

In recent interviews, military officials and Sharon associates stressed that Israel neither wanted nor intended to reinvade Palestinian areas -- an operation that could bog down the army and exact a heavy human, economic and diplomatic price. Yet the same officials have said the level of violence, the worst in a decade, has become intolerable.

About one-fifth of the West Bank and two-thirds of the Gaza Strip are fully controlled by Arafat and his 40,000-member armed police and security forces. Palestinians have consistently vowed to resist fiercely any Israeli attempt to reoccupy their part of the territories, which Israeli forces captured in the 1967 Middle East war and have withdrawn from in stages beginning in 1994 following the signing of the Oslo peace accords.

But Israel has by far the most modern army in the region, and Israeli officials say it would not be difficult militarily to retake Palestinian towns and villages. The problem, they say, would be holding on to them and dealing with the armed and hostile Palestinian population.

"This is not a military challenge for us," said an Israeli official. "This is not the issue. To take back Jericho [would take] maybe one hour. Nablus, a couple of hours. . . . Gaza? In the Six Day War [of 1967] it was just on the way to Sinai. To take it would be a few hours. But to deal with it -- this is something else."

Sharon, 73, was known in the 1970s and '80s for aggressive tactics in combating Palestinians. And he has repeatedly said his top priority will be to reestablish a sense of security for Israelis. In a speech Tuesday, he repeated that Israeli security was his "central goal" and that under his leadership the government would not resume peace efforts until Arafat halted the violence.

During his campaign for prime minister, Sharon said he regarded it as a "concession" that Israel had not reinvaded Palestinian territories. Nonetheless, his aides stress that invading cities in the West Bank and Gaza is far from his preferred option. Rather, they say, he plans to present the Palestinians with a mix of economic incentives and penalties and also to mount a diplomatic offensive in Washington and other Western capitals aimed at pressing Arafat to calm the situation. He also plans to offer Israeli recognition of a Palestinian state in the West Bank and Gaza territory that Arafat already controls, in return for a nonaggression pact.

But Arafat has already turned down a considerably more generous offer from Israel's outgoing prime minister, Ehud Barak. And there has been no sign that Arafat would be willing to consider what amounts to a dramatically scaled-back proposal, despite the rapidly deteriorating Palestinian economy.

Palestinian passions have been stoked by the daily stream of deaths and injuries in clashes with Israeli troops. The head of Arafat's Fatah movement in the West Bank, Marwan Barghouti, vowed today -- for perhaps the hundredth time -- to press ahead with the armed uprising. He said he would do so even if Arafat ordered him to stop, but added that he is certain Arafat would never issue such an order.

Many Israeli analysts say they expect the violence to continue, and perhaps intensify, after Sharon takes office. In his speech today, Mofaz said the violence could last many more months, at the least.

Meir Dagan, a retired major general who has advised Sharon on security, said he would not rule out incursions into Palestinian-controlled areas, but he said he was not in favor of reoccupying them. "I don't consider the . . . lines [between Israeli- and Palestinian-controlled territory] as holy, and if it's a necessity to cross them to deal with terrorists, I don't see any boundaries or refuge," he said.

Another associate of Sharon, speaking on condition that he not be identified, said the incoming Israeli leader was counting heavily on diplomatic pressure to improve the security situation. But, this associate said, Sharon is unlikely to wait months for economic and diplomatic pressure to take effect. If there is no easing of the violence within weeks, he predicted, Sharon's government will probably start to consider other options.

Sharon's associate said he neither hopes nor expects that Israel will retake Palestinian-run land. Yet if Israel were forced to do so as a "last, last resort," he said, the diplomatic price would be secondary to the "well-being and security of the people."

He added: "The world has got a little bit spoiled if they would expect Israel to be hit and succumb and not . . . respond, and to let [the Palestinians] get away with terror. It's going to be a different Israel. It's going to be an Israel that is first and foremost concerned with its security."