By Tarek Hassan On 4 May 1999 the five-year interim period established by the Palestinian-Israeli Declaration of Principles, or the Oslo Agreement, comes to an end. Short of what now appears a highly unlikely breakthrough in the stalled Palestinian-Israeli peace process before that date, the Oslo Accords will, on 4 May, have become defunct, legally null and void. Paradoxically, the Palestinian Authority (PA) led by does not appear excessively worried by this seemingly ominous prospect. If anything, now that Arafat is determined to declare a Palestinian state unilaterally if the negotiations with Israel remain stalled, PA officials seem to be looking forward to the 4 May deadline. The basic reasoning among PA officials is that, by declaring a state, the Palestinians have very little to lose and possibly a lot to gain -- at least insofar as the move intensifies pressure on both the US and Israel to move towards a settlement that meets basic Palestinian demands. According to one PA source, the Palestinians are now in a substantially stronger position than they were at the time of the Madrid Peace Conference in 1991. "We have territory of our own, over which we exercise direct control, whereas before we had to operate from neighbouring Arab countries. Also, we are dealt with as a legitimate entity after decades of having been viewed as a motley collection of groups with no legal persona. Now we have our own armed forces and official institutions that enjoy more autonomy than ever before," the PA source said. According to the interim agreement, the Palestinian Authority is permitted a police force of some 35,000 men, although the Israelis complain that it is actually 60,000 strong. The PA feeling is that the operative life of these forces is not bound by the end of the transitional phase. Indeed, some PA sources argue, this armed force may eventually come to pose a greater threat to Israel than the Intifada. According to one source, this armed force will have the capacity to engage in low-level, tactical operations of attrition. Their effectiveness will be enhanced by the great boost in morale and Palestinian national unity that the unilateral declaration of a Palestinian state will trigger. The end of the transitional phase also means that the territories under direct Palestinian control will revert to the PLO, Palestinian sources suggest, since the structures established in accordance with the Oslo Accords, such as the PA and the Palestinian Legislative Council (PLC) will have lost their legal foundations. For this reason, Palestinian officials are now considering ways to incorporate these institutions within the PLO organisational structure. The PLO, they argue, is legally entitled to assume the administration of the territories under Palestinian control. It signed the Oslo accords with Israel, and has been formally recognised by it as the representative of the Palestinian people. The PLO, it is argued further, has recently acquired quasi-state membership in the UN, while the Palestinian National Charter provides the legal basis for the creation of a Palestinian national authority on any part of Palestinian land that is liberated from or ceded by Israel. In anticipation, the Palestinian leadership is now redoubling its efforts to bolster national unity and effect a reconciliation with other major PLO factions, as well as with the Islamist opposition represented by Hamas and Jihad. In this respect, Arafat recently approved in principle a proposal submitted by the Democratic Front for the Liberation of Palestine (DFLP), headed by Nayef Hawatmeh, to convene a conference for Palestinian national dialogue to which all Palestinian factions would be invited, including Hamas and Jihad. Meetings are under way to ensure that the conference is convened and the DFLP has proposed Cairo as the venue. Meanwhile, Arafat has been actively laying the groundwork for the declaration of a Palestinian state next May. Though that state will claim sovereignty over the West Bank within the pre-June 1967 borders, Gaza and East Jerusalem, in practical terms, PA sources admit that state will be confined, at the start, to the territories currently under PA control. They believe, however, that the formal declaration of statehood will give the Palestinian side far greater negotiating strength than they have had under the Oslo Accords. For one thing, they seem to be confident of substantial international support for the declaration of statehood, most significantly from the member states of the European Union. According to official Palestinian sources, both France and the UK have expressed support for the unilateral declaration of a Palestinian state if Netanyahu's government continues to obstruct the peace process until May of next year. The declaration of a Palestinian state topped Arafat's agenda during his recent talks in Austria -- soon to assume the presidency of the EU -- and during his recent meetings with Chinese officials. Arafat is also confident that the Arab World and a considerable number of Islamic, Asian and African countries will support of the newly-declared Palestinian state. The big question, however, pertains to how Israel, and to a lesser extent the US, will react to such a declaration. The worst-case scenario, according to PA sources, would be for Netanyahu's government to respond by declaring its annexation of some 50 per cent of West Bank territory, imposing a military and economic blockade on the areas under Palestinian control, and perhaps launching a military operation to reoccupy some of these territories. Such a response would constitute a declaration of war on the Palestinians. And though the predominant view among Palestinian policy-makers is that Israel is too isolated internationally and too divided domestically to adopt such an implacable stance, they do not seem to view even this worst-case scenario with as much dread as might be expected. They suggest that under conditions of wide international support for the newly-declared state, the outbreak of Israeli-Palestinian hostilities may turn out to be just the catalyst needed to push the international community, and the US in particular, to intervene with sufficient strength and urgency, to force Israel to move seriously towards bringing an end to its occupation of Palestinian land.