JERUSALEM, March 24 (JTA) — Did Palestinian Authority leader Yasser Arafat give the green light for militant groups in the self-rule areas to resume terror attacks against Israel? According to top Israeli officials, the answer is a resounding yes. Palestinians, not surprisingly, dismiss the Israeli charges. And for their part, American leaders come down with a murky maybe. In the wake of last Friday”s suicide bomb attack at a Tel Aviv cafe, the question is more than academic. And the answer, while it may never be known for certain, has dire repercussions for the future of the peace process. With mutual trust already at a low point, Israeli-Palestinian relations could blow up all together if Arafat is seen as using militant forces and street violence to further his own political agenda. In interviews after last Friday”s suicide bombing at a Tel Aviv cafe, Prime Minister Benjamin Netanyahu placed the blame for the deadly attack squarely on Arafat. On March 9, as Israel was planning to launch construction of a controversial Jewish neighborhood at Har Homa in eastern Jerusalem, Arafat met with leaders of Islamic fundamentalist groups and gave them an indirect go-ahead to resume their terror campaign, Netanyahu charged. Israel”s chief of army intelligence, Maj. Gen. Moshe Ya”alon, gave the same assessment Sunday, saying, “Arafat gave the green light and so far has done nothing to cancel the signal.”” At the March 9 meeting, Ya”alon said, Arafat spoke angrily about Israel”s “expansionist”” policy at Har Homa, broadly hinting that he would no longer oppose terrorist actions by Hamas or Islamic Jihad. Less than two weeks later, a Hamas suicide bomber entered a Tel Aviv cafe and set off an explosion, killing three Israeli women and leaving many political observers linking Arafat”s signals with the militant”s actions. For their part, American officials initially were reluctant to jump to such conclusions, saying that intelligence reports gave insufficient evidence to charge that Arafat deliberately caused the resumption of terror. In the absence of such hard evidence, some observers believe that the Israeli charges are part of an attempt to discredit Arafat on the world stage. U.S. officials were clearly trying to navigate a difficult path between the escalation of charges emanating from Jerusalem and the Palestinian Authority, who blamed Netanyahu”s acts for the resumption of violence. At the United Nations last Friday, the United States vetoed for the second time in two weeks a Security Council resolution criticizing the Israeli construction plan. The move came despite U.S. opposition to the Har Homa project. But in recent days, the Clinton administration appears to have shifted the burden to Arafat to prove that he is clearly opposed to violence. At a weekend news conference in Helsinki, Finland, where he held a summit with Russian President Boris Yeltsin, President Clinton said, “The Palestinian Authority has to make it clear that it is unalterably opposed to terror.”” The State Department reiterated that point Monday, stressing that the message must be sent to the militants themselves. Clinton”s comment came as a correction to an earlier statement at the same news conference in which he said, “There must be absolutely no doubt in the minds of the friends or of the enemies of peace that the Palestinian Authority is unalterably opposed to terror.”” Although he soon corrected that statement, sources in Washington later said that Clinton had “botched”” his handling of the issue. For her part, U.S. Secretary of State Madeleine Albright said on CBS” “Face the Nation””: “There is no concrete evidence”” of Arafat”s involvement in terror, but then added, “There clearly is a perception of the green light.”” Palestinian officials, meanwhile, flatly dismissed the charges against Arafat. Ziad Abu-Ziad, coordinator of the Palestinian Authority”s Jerusalem Committee and editor of the quarterly Palestine-Israel Journal, described the charges as “nonsense.”” “Arafat is under constant pressure by the [militant] opposition,”” he said in an interview. “But he is strongly opposed to violence.”” As proof, he cited how Arafat called Israeli President Ezer Weizman to condemn the Tel Aviv attack. Ziad insisted that militant groups represent only a marginal portion of Palestinian society, and he described terror attacks as “acts of despair by individuals.”” Other Palestinian officials have repeatedly stated that the blame for last Friday”s terror attack rested on the Israeli decision to start construction at Har Homa last week. As the charges and countercharges mount, the future of the peace process remains murky. Israel”s Inner Security Cabinet met Sunday and demanded that the Palestinian Authority “fulfill its commitment to fight terrorism and violence, as a necessary step to advance the political process.”” As part of this commitment, the ministers called on the Palestinian Authority to crack down on terrorist groups and to strengthen security cooperation with Israel — as the Palestinians agreed to do in the Hebron agreement signed in January. The Palestinians” determination to crack down on militant groups was thrown into doubt Monday, when Mohammad Dahlan, the head of the Palestinian security service in the Gaza Strip, flatly rejected the Inner Security Cabinet”s demands. “We will not accept or deal with the Israeli conditions, and we will treat them as if we didn”t hear them,”” Dahlan said at a news conference. After the wave of terrorist attacks exactly one year ago, Arafat demonstrated that he knew how to take action against Islamic militants. At one point, there were some 1,000 militants in Palestinian jails — but most of them have been released over the course of the past year. The Clinton administration reacted with alarm to these releases, the Washington Post reported Monday. Concern about the releases arose during Arafat”s recent meetings in Washington with Clinton and Albright, and CIA Director-designate George Tenet made name-by-name demands that the Palestinian Authority rearrest the most dangerous militants, according to the report. Nonetheless, Arafat recently gave the order to release 150 fundamentalist activists, among them Ibrahim Makadmeh, who is believed to be the mastermind behind many terrorist attacks. When the terrorist bomb exploded last Friday, Makadmeh was speaking at a Hamas rally in Gaza, threatening that Palestinian militants would embitter Netanyahu”s life and cause him to “scold the day he was born, and wish that Jerusalem was washed to the sea.”” Shortly after Makadmeh made the speech, he went underground, apparently concerned that Arafat wanted him behind bars again. Palestinian security officials said Sunday that they had issued a warrant for his rearrest. Meanwhile, violence continued in the West Bank, where Palestinian stone-throwers engaged in daily clashes with Israeli soldiers in the aftermath of the cafe bombing and the start of the Har Homa construction. On Sunday, Ya”alon accused Jibril Rajoub, who is in charge of Palestinian security forces in the West Bank, of staging the rioting in Hebron, where scenes of Palestinians pelting Israeli soldiers with a hail of stones were reminiscent of the worst days of the Palestinian uprising. Rajoub denied the charges Monday, saying that they were false accusations made by the Israeli army intelligence chief to cover his own failures. Despite the overheated atmosphere, Arafat left the region this week, traveling to Islamabad, Pakistan, for a previously planned conference of Islamic countries, and then to Morocco. On Monday, Foreign Minister David Levy called on Arafat to return immediately to the region to deal with the crisis. The prospects of an Israeli-Palestinian rapprochement, meanwhile, seemed more remote this week than they have in years. “Whoever wants to blow up the peace process may have found his golden opportunity,”” said Ziad. At this point, both Israel and the Palestinians appear to have found ample reason to blame the other side for causing that potential explosion.