By Daryl Lindsey

In Jerusalem and Ramallah on Friday, leaders bickered over where they were going to bury Yasser Arafat if, as most believe, his death is imminent.

A short geographical hop away, Europeans began earnestly considering what the future might hold for the Israeli-Palestinian conflict in a post-Arafat era. European Union leaders have ordered Javier Solana, Brussels' foreign policy chief, to prepare for the worst by consulting with Israel, the Palestinians and the members of the so-called Quartet for Middle East peace, which includes the United States, Russia, the United Nations and the EU.

"We expressed our solidarity with the Palestinian people and also the hope that in the period ahead we will be able to work with the legitimate leadership, with the new leadership of the Palestinian Authority," Dutch Foreign Minister Bernard Bot said on Thursday.

Many here believe it could also blow wind into the sails of the stalled peace process. "Arafat's passing could be an opportunity to move the peace process forward because his presence is used by Israel as an excuse to freeze" it, Nomi Bar-Yaacov, a Middle East expert at the International Institute for Strategic Studies in London said. "The excuse that's always been given is that there was no partner among the Palestinians, but the issue has always been personal -- it meant Arafat."

The Palestinian leader has always been a polarizing figure -- the contradictions in his life are at least as big as the Middle East conflict. He began his political career as a terrorist in the Palestine Liberation Organization but later rehabilitated his image to the point of winning a Nobel Peace Prize in 1994, an award he shared with Shimon Perez and Yitzhak Rabin for the Oslo Peace Accords. But after the second intifada began in 2000, European and US leaders complained that Arafat tolerated the suicide bombings that ground the peace process to a halt and led Israel to reoccupy most of the Palestinian territories. He has failed to annoint a true successor and he has been flooded with accusations of funneling international aid funds into private accounts. Add to that his poisoned relationship with Israeli Prime Minister Ariel Sharon and it's no wonder some are dreaming of the day when he is no longer part of the equation.

Who will succeed him?

But his absence from the scene has the potential to trigger even bigger problems -- including a serious power vacuum. After Arafat was flown to Paris for treatment last week, his responsibilities were assumed by Ahmed Qurei, prime minister of the Palestinian Authority, and former prime minister Mahmoud Abbas, who is the second in charge in the Palestine Liberation Organization. But neither is a proven leader, since Arafat never relinquished much power to them.

"Arafat hasn't trained anyone to succeed him," said Rémy Leveau, a researcher on the Israeli-Palestinian conflict at the French Institute for International Relations. "The people around him are just accessories." Neither does Leveau have much faith in the younger generation of PLO leaders like Muhammad Dahlan, who observers say is favored by Israel and the United States as a successor to Arafat. "The relatively younger leaders like Dahlan have no legitimacy," he said.

And even if Qurei and Abbas are able to preserve their current roles during the transition period after Arafat's death, there is a strong chance their power will be challenged. After all, Arafat is a hero to his people and though he has been plagued with serious charges of corruption he has more or less kept the different factions united.

"I expect there will be a power struggle between the different groups" said Udo Steinbach, head of the German Institute for Middle East Studies in Hamburg, Germany. Most likely, that tug o' war will be waged between three parties. They are loosely split between Arafat's inner circle, who lived with him during his exile years; a group of younger Palestinians who followed Arafat because of his charisma but never really bought into his policies, like Marwan Barhouti, a Fatah military commander who is serving multiple life sentences in an Israeli prison; and extremist groups like Hamas (whose political arm even the European Union has put on its list of international terrorist organizations) who will try to take advantage of the power vacuum. "The conflict between these groups could get militant -- we shouldn't rule out the possibility of an armed conflict, it's quite probable," Steinbach warned.

On Friday, some of those rivaling factions met in the Gaza Strip in an effort to find unity and many observers believe they will reach some kind of power-sharing agreement. Power sharing in the beginning might be important, but you don't have to look very hard to find broad agreement that freely held elections are the only way to kick start peace negotiations.

Is peace possible?

The calculus is simple: with a new government in place, Israel could no longer knee-jerkingly say it has no potential partner for peace talks as it has with Arafat -- and not always without reason. And that would open the door for both Europe and the United States to push for new action.

One of the main questions Europe will be asking is whether the Bush administration will return to the road map peace approach promoted by Brussels. In April, Bush said it was "unrealistic" to expect Israel to completely withdraw its settlements in the West Bank and Gaza Strip in order to restore the borders that existed prior to the Six Year's War in 1967. But the EU says it will only accept changes to those borders if they are agreed to by both the Palestinians and Israelis.

The quartet has struggled with other serious problems: Europe provides economic aid to the peace process and the Palestinians, but the US acts unilaterally on the political and security side. "Europe and the US need to devise a unified approach that re-links the disengagement plan (Israel's withdrawal of settlements from the Gaza Strip) to the road map and at the same time links political, economic and security issues. Arafat's passing away is an opportunity to do that," Bar-Yaacov explained.

Bush II may also be more motivated to push for a solution in the conflict. "It's Bush's second term and he's already proven his points," she said. "He doesn't need to prove anything to the Jewish lobby a second time. He's messed up in Iraq and he needs to prove himself to the Arab world and the American people. So many American lives have been lost that he must show he can be even-handed. He doesn't want to mess up the Israeli-Palestinian conflict."

Still, it's likely Europe and the US will again lock horns over the Middle East issue if Bush tries to bypass the road map, which clearly states the European goals for a peace settlement. EU foreign ministers meeting in Luxembourg last month once again reiterated their ultimate goal: "a viable, contiguous, sovereign and independent Palestinian State existing side by side in peace with an Israel living within recognized and secure borders."