Palestinians Build New Institutions In Eager Anticipation of Autonomy

EVEN as talks in Washington on Palestinian autonomy bog down, visitors to the New Orient House in East Jerusalem could be forgiven for thinking they were on already-autonomous Palestinian territory.

The Polish foreign minister, for example, left his Israeli security escort outside the gate when he paid a courtesy call Sunday evening. Inside the grounds of the historic mansion belonging to Palestinian leader Faisal al-Husseini, he was protected by neatly dressed Palestinian security men, even if they were armed only with walkie-talkies and cans of Mace.

Officially, the luxuriously appointed reception rooms of the former hotel are a "Palestinian guest house," and the offices installed in a wing of the building are the headquarters of the Palestinian delegation to the Middle East peace talks in Washington. (Progress hinges on Clinton, Page 2.)

But Palestinian wags have already dubbed the New Orient House "government house," and as the peace talks resumed yesterday, the work under way here is only one sign of the embryonic Palestinian institutions that are quietly being prepared for an autonomous regime.

The philosophy behind these preparations was explained recently by Sari Nusseibeh, a prominent Palestinian academic heading a string of "technical committees" that are laying plans for a future Palestinian administration.

"The Palestinians should take unilateral steps at state building that go side by side with the negotiations," he told the Palestinian daily Al Fajr. "We must not only complain about the unilateral steps Israel is taking against us."

As Dr. Nusseibeh's 30 committees map strategy, small but tangible projects are already taking shape on the ground:

* At Bir Zeit University on the West Bank, 750 teachers are being retrained for the new educational system that Palestinians anticipate they will be running.

* In nearby Ramallah, work is under way on a building due to house the West Bank's first Palestinian commercial bank.

* A Palestinian filmmaker in East Jerusalem is putting together the nucleus of what he hopes will one day be a Palestinian TV station.

* In the West Bank and Gaza Strip, hotels and restaurants are refurbishing themselves with aid from the European Community.

In round after round of talks in Washington during the past year, Israeli and Palestinian negotiators have wrestled to define the scope of an autonomous Palestinian regime's authority. In the end, an increasing number of Palestinian activists say, what they will be authorized to do under autonomy will be no more important than their practical ability to do it.

"My nightmare," says East Jerusalem filmmaker Daoud Kuttab, "is that the Israelis will grant us a television license without our being ready, and we will find ourselves having to hire Israeli crews to produce Palestinian TV." `In a Palestinian context'

Mr. Kuttab, heading the nonprofit Jerusalem Film Institute, is now helping to train Palestinian cameramen and other technicians and trying to organize the Palestinians here who work for foreign TV firms to pool their skills.

"The idea is to get these professional practitioners to work together in a Palestinian context," Kuttab says, perhaps by running a workshop that would culminate in the presentation of a half-hour "Palestinian evening news."

"That would be a morale booster for the Palestinian people, to show that we have the ability to produce good, professional, responsible news. And the more you prepare and work in this direction, the more pressure you create to force the Israelis to deal with you," he argues.

Kuttab is also in touch with a number of Palestinians working at TV stations in Persian Gulf countries who are eager to come home. The flood of Palestinians forced out of the Gulf in the wake of Iraq's invasion of Kuwait - a huge source of skills and experience - could be a blessing.

Now in the last stages of setting up the Commercial Bank of Palestine, Suhail Gedeon says he has had "more than enough applicants from Palestinians in the West Bank who were senior managers in Gulf banks and are now jobless" to staff his operation.

Mr. Gedeon, expecting final authorization from the Bank of Israel within two months, plans to open his bank next June. He says he is confident of success partly because of the new political climate. "After the Madrid [peace] conference [in November 1991] was the right time," he says.

The new climate also has hastened work on education. "We have been taking this work seriously for the past few months, because there is a ray of hope," says Ahmad Musa, deputy president of the Palestinian Higher Council for Education. The Council is planning a new curriculum for schools under Palestinian authority, as well as encouraging teacher-training programs. Development bank forming

In economics, much remains to be decided, including such basic issues as the relative weight to be given to the public and private sectors. But already, five Palestinian credit institutions are banding together to establish a fund that will become a development bank.

"The interim period [prior to resolution on the occupied territories' final status] will be one of reconstruction," says Samir Hileileh, a Palestinian representative to multilateral talks on economic questions.

"The main need will be for development banks" that can give long-term, low-interest loans to new businesses, he predicts.

As technical committees study fiscal policy and customs regulations, reconstruction is already underway in the tourism industry, which Mr. Hileileh expects would be Palestinians' top revenue earner were Israeli troops to withdraw.

The steps are small, but significant, if only for the confidence they show in the future: An old hotel in Gaza is being refurbished, a garden restaurant is under construction in Nablus, and hot springs outside Jenin are being turned into an attraction.

In Nablus this summer, the authorities registered more than twice as many property and land transactions as they did last year.

"This is a signal that people are interested," Hileileh says. "It's a sign that Palestinians have some hope here."