Suzanne Goldenberg: No Easy Way Out of the Wreckage for Arafat

In his first steps on his victory tour through the wreckage of Ramallah yesterday, Yasser Arafat embarked on a parallel journey from self-styled "martyr in the making" and symbol of Palestinian resistance to flawed mortal confronting gargantuan challenges.

His people are exhausted, his bureaucracy and security services are destroyed, the economy is in ruins, and Israel's prime minister, Ariel Sharon, is implacably opposed to the territorial concessions necessary for a viable Palestinian state.

Here are some of the problems facing Mr Arafat, once the celebrations are over:

Mr Arafat's freedom is severely circumscribed, and there are no guarantees it will last. Though he can leave his headquarters, he cannot travel easily because Israel destroyed his helicopters and dug up the runway of the only Palestinian airport.

Although Mr Sharon did not succeed in keeping Mr Arafat caged indefinitely as he had hoped, he has made it his personal mission to expel the Palestinian leader from the West Bank and Gaza, despite opposition from Washington and the international community and Mr Sharon's moderate Labour party allies.

In an interview with ABC television, Mr Sharon reneged on a promise to the US and Britain that Mr Arafat would be allowed to return to the occupied territories should he embark now on a diplomatic tour, as some have predicted.

"We're not going to give any guarantees, because usually in the past when he left, it was always a sign for a wave of terror," Mr Sharon said on Wednesday. "So if there will be a wave of terror, and if he'll be going around the world inciting... then we have to consider and discuss what to do."

Mr Sharon will not end the Israeli army incursions into Palestinian towns in the West Bank, and he has signalled his intent to invade Gaza as well. That means Mr Arafat has lost control of the isolated cantons that were designated Area A under the Oslo peace agreements - where Palestinian security forces were to have exclusive charge. He has lost the heart of his putative Palestinian state.

Hours after pulling back from Mr Arafat's headquarters yesterday, Israeli forces invaded the West Bank city of Tulkaram, and Mr Sharon told ABC television that such incursions would continue.

Mr Arafat emerged to a wasteland. Across the West Bank, police stations have been reduced to rubble, and government ministries and other offices, such as human rights groups, schools, and cultural centres, were ransacked by Israeli forces, and their computers and files carted away. There has been enormous damage to roads, and electricity and telephone lines; the economy is in ruins. Palestinian officials say they need $350m (£240m) to repair infrastructure; they have received pledges of $150m.

Before the intifada, the Palestinian leader displayed little or no interest in institution building. Jurists and academics despaired as Mr Arafat fought efforts to build a functioning legal system, and an accountable bureaucracy, preferring to rule through personal patronage.

Mr Arafat's captivity played to his strengths as a symbol of Palestinian endurance. As of yesterday, however, the need is for reconstruction.

Despite the television pictures yesterday of Mr Arafat wielding a paintbrush, he is even less capable of effective action than before because his most trusted aide, the chief financial officer of the Palestinian Authority, Fuad Shubeiki, is in jail as part of the deal which won Mr Arafat's freedom. As time passes, critics are bound to ask: is Mr Arafat the man for the job?

Mr Arafat owes his freedom to Washington, and a deal under which US and British guards will monitor the detention of six Palestinian prisoners at a jail in Jericho. In return, President George Bush can be expected to step up his demands that Mr Arafat show willingness to stop suicide bombings inside Israeli cities, and to work for a ceasefire.

Yesterday, however, the Hamas leader in Gaza, Abdel Aziz Rantissi, said attacks on Israel would continue.

Does Mr Arafat have the leverage to impose a ceasefire on a population hungry to avenge last month's offensive with a new campaign of suicide bombings? How will he police one with his security forces in ruins?

The Palestinian leader has angered the second largest party in the PLO, the Popular Front for the Liberation of Palestine, by handing over its leader, Ahmed Saadat, to the US and British jailers. Mr Saadat has not been put on trial, and is regarded as a political leader, and not a military man, by his followers.

Supporters of the leftwing PFLP have begun to channel their anger at Mr Saadat's imprisonment into a campaign demanding reform. So have some of Mr Arafat's loyalists. "From the first day, he must start real reform, and change his cabinet, and he must unify the security forces and reform the judiciary," Mr Arafat's minister for parliamentary affairs, Nabil Amr, said this week. "This is a popular demand and we in the government must support it."

Mr Arafat anticipated such discontents earlier this week when he discussed the prospect of calling municipal elections in the West Bank and Gaza.

However, it will be impossible to hold elections so long as Israel controls the roads in the West Bank, and Mr Sharon is unlikely to favour holding polls now. Instead, Mr Arafat is likely to embark on a shuffle of his cabinet.