MR ARAFAT, who visits Britain this week, has presided over something

of a miracle: the tentative understanding with Israel which has so

dramatically altered the prospects for peace in the Middle East. His

part in that effort deserves much credit even though it was not the only

part -- the Israelis are taking a gamble too. Britain's role in

Palestine is more historic than contemporary, but the history is

dramatic. It includes the Balfour Declaration of 1916 which first used

the phrase ''Jewish national home'' and the British holding of the

League of Nations Mandate for Palestine which ended only after the

Second World War. Arab opinion has always been critical of that role, in

spite of the almost permanent pro-Arab bias in British Middle Eastern

diplomacy for the greater part of this century. The history is

unalterable but it should not be an impediment to good relations with

the new Palestinian state, especially when there is so much that this

country can contribute to some aspects of its success.

Stories of Ottoman gold held by the Treasury and destined to be handed

back to Mr Arafat's Palestinian National Council are almost certainly

far-fetched, but the Government might be more helpful in providing

trained administrative personnel in areas where the Palestinians admit

to being seriously deficient. The community best placed to provide such

aid is, of course, Israel -- but it is asking too much to expect such

transfers to occur so soon. Much time may be needed to heal the deep

bitterness felt on both sides. The peace agreement is a fragile

construction. There are divisions inside British Jewry about the wisdom

of their representatives meeting Mr Arafat at all. Yet he will be met:

the

hope which triumphed in Norway, and then the Knesset, as well as in

Palestinian counsels has affected British Jews too.

Few people, whatever their precise position in this debate, will be

unaware of the forces militating against it. Many violent efforts will

be made to undo it, by groups on both sides. That both lots of

extremists oppose it may be the best guarantee that it is broadly right.

Words are always better than bullets for the most simple reason -- they

can be reconsidered. And they can carry advice without bullying. In that

respect the Brit

ish Government should, like Mahmoud Abbas, try to encourage Mr Arafat

to promote Palestinian democracy.