"Chairman Arafat must... choose, once and for all, the option of peace over violence," testified Secretary of State Colin Powell before Congress on February 5. If you had a dollar for every time an American official, from the President on down, has said this during the last eight years, you could fund the Pentagon.

A few days earlier Powell had called this "a moment of truth for Chairman Arafat." Was not the moment of truth supposed to be September 13, 1993, when Yasser Arafat shook hands with Prime Minister Yitzhak Rabin on the White House lawn and solemnly committed the PLO to peace?

Yet after the bloodiest Palestinian violence in half a century, in the midst of Arafat's now 16-month campaign of calculated terror, here we are again, importuning him to promise peace just one more time.

This is Lucy and the football. How many moments of truth does a liar get?

Arafat has no intention of making peace.

Arafat has no intention of making peace. He may be talking truce now, but only because he is desperate. With the latest wave of terror in Israel, followed by the interception of the Karine A carrying 50 tons of Iranian arms to the Palestinian Authority, he sits in Ramallah, isolated, surrounded and friendless.

So he starts talking peace, precisely as he did in 1993 when, after he backed Saddam Hussein in the Gulf War, he sat in Tunis isolated, friendless and penniless (Kuwait expelled its Palestinians; Saudi Arabia totally cut Arafat off). Arafat's expressions of peace were phony then. They are phony now. Everyone knows that as soon as he is back on his feet, he will be back again at war.

But for the United States, the issue is more than just the current violence. It is one thing to tolerate a man who American negotiators privately call a liar and a terrorist, so long as the consequence of his lying and his terrorism is simply local violence in a faraway place -- a serious problem for the US, but not a strategic threat.

The Karine A, however, demonstrated that the PA had developed a military relationship with Iran, the country the State Department calls the single worst source of terrorism in the world. Hence, the awful outcome of the Oslo "peace process" finally becomes clear: not peace, not a demilitarized Palestinian state living side-by-side with Israel, but an Iranian client-state -- a new member of the "axis of evil," well-armed, terrorist and violently anti-American -- planted in the heart of the Middle East, destabilizing not just Israel but Jordan, Saudi Arabia and Egypt. That the United States cannot tolerate.

The Bush Administration has responded to this strategic threat by freezing out Arafat. But it is reluctant to cut him off completely. He is the devil they know. They are afraid that what follows will be worse.

For an administration that has courageously broken new ground in confronting strategic threats in the region, this is a rare lapse into passivity and complacency.

This is a decisive moment. America's demonstration of strength in Afghanistan has changed the entire psychology of the Near East. Leaders everywhere are lining up with the Americans, having witnessed the cost of being on the wrong side of history.

Not Arafat, however. He remains incorrigible. (His personal letter to U.S. President George W. Bush claiming no knowledge of the Karine A was beyond embarrassment. It was insulting.) What happens if Arafat goes? There are two likely outcomes. First, the mantle of leadership passes to some of his commanders and associates, such as Mohammed Dahlan, Jibril Rajoub, Abu Ala and Abu Mazen. Whether out of inclination or out of realistic reading of the power relations in the region, most of these men see the intifada as going nowhere. They may be willing to end it.

Alternatively, after Arafat there may be no national leadership. After all, the Palestinian Authority is an alien exile entity superimposed upon the West Bank and Gaza in 1993. It turned out to be corrupt, oppressive, economically ruinous and congenitally violent. Arafat leaves behind no lasting national institutions except for his myriad security forces. These forces, and the strongmen who control these private and separate armies, could well inherit the kingdom.

In this alternative scenario, the Palestinian policy fractures. There will be strongmen running different areas, Dahlan running Gaza, Rajoub running parts of the West Bank. Other towns will have their rulers. Each will have to make his deal, his arrangement, his peace, with Israel.

That will be the interim. And that interim will end when the Palestinians decide to produce new national leadership ready to make real peace, At which point, Israel (and the United States) will welcome a true peace partner.

But none of this can begin to happen until Arafat is gone.