JERUSALEM, June 18 (JTA) — Israeli Prime Minister Ariel Sharon and his defense minister, Benjamin Ben-Eliezer, insist the fence they officially began building this week, more or less along the old border between Israel and the West Bank, is for security purposes only. But chances are the fence will have major political implications. Already, right-wing Israelis are accusing the prime minister of restoring the borders that existed before the 1967 Six-Day War. Their public relations campaign dubs this boundary, which leaves Israel extremely narrow at points, the “Auschwitz borders.” Settler leader Yisrael Harel charged on national television that the fence was just a first step in an impending Israeli withdrawal from the entire West Bank. It was evidence of a defensive, ghetto mentality, and soon Israel would regroup all its forces behind the new line, Harel said. The settlers may be overstating their case, but they have reason for concern. One of the arguments for settlements in the West Bank was that they would contribute to Israel’s security. But the very act of building the fence — and leaving the settlements on the other side — is a tacit admission that the settlements contribute little if anything to Israel’s defense. On the contrary, the existence of the settlements beyond the fence will force the army to allocate considerable resources to defend them. As time goes by, the fence will become a psychological fact of life, a symbolic divide between Israel and the Palestinians, and public pressure to shorten the lines and give up the settlements is likely to grow. The settlements’ raison d’etre increasingly could be called into question. Movements like the Four Mothers, which pressed successfully for an Israeli army withdrawal from southern Lebanon, may well spring up demanding that the “boys be brought home” from the West Bank, too. The debate over whether to build the fence took on added significance Tuesday, when at least 19 Israelis were killed and 52 wounded in Jerusalem by a Palestinian suicide bomber. Many of the passengers were students on their way to school. Following the bombing, police officials warned that there might soon be more attacks in Jerusalem. Ironically, the Palestinians also oppose the building of the fence: They denounce it as a unilateral move that shows Israel is preparing to perpetuate the “occupation” of land the Palestinians claim. Palestinian Authority President Yasser Arafat went so far as to call the fence, designed to keep Palestinian terrorists from reaching Israel, a manifestation of “racism and apartheid.” Indeed, what concerns the Palestinians more than the fence is the “fence mentality”: If taken to its logical conclusion, that mentality could lead to a separation not just between the two peoples but between their economies. Over a period of years, that could prove disastrous for the Palestinians. Some Palestinians, in fact, contend that Sharon’s goal is precisely to impoverish West Bank Palestinians and precipitate an exodus to neighboring Jordan — with the fence as part of the scheme. Others, however, see reason for optimism. The building of the fence, which officially began on Sunday, comes as moves for political accommodation between Israel and the Palestinians appear to be gaining momentum. Though it is intended as a defensive measure against ongoing terrorism, the fence could help concentrate minds on both sides and clarify issues, spurring a resumption of the diplomatic process, the argument goes. To pre-empt a fence they don’t want, Palestinians may be prepared to be more conciliatory, as in the proposal they reportedly presented to President Bush that appeared to somewhat soften their demands. On the Israeli side, because of the planned line the fence is meant to follow, Israelis may be more prepared psychologically to withdraw almost to the 1967 border, and recognize a Palestinian state in the evacuated territory. But that is still a long way away. The American idea floated recently for a provisional Palestinian state without final borders is meant to signal to the Palestinians that there is light at the end of the tunnel — provided they build responsible governmental institutions and stop terrorism against Israel. The Palestinians, however, want a firm timetable to move from provisional to full-fledged statehood. Otherwise, they say, they could be left with a truncated mini-state. Sharon is adamantly opposed to any such timetable, however. In his early June meeting with President Bush, Sharon argued that establishing a binding time frame for Palestinian statehood would remove any incentive for reform — because, at the end of the allotted time, the Palestinians could count on getting their state, whether or not they had reformed their institutions. Instead, Sharon recommends establishing performance benchmarks the Palestinians would have to meet before proceeding on each stage toward statehood. The early signs are that the Bush administration intends to play hardball with both sides. In a mid-June interview with the San Jose Mercury News, National Security Adviser Condoleezza Rice had tough words for both leaderships. “The Palestinian Authority,” she said, “is corrupt and cavorts with terror,” and therefore “is not the basis for a Palestinian state moving forward.” In other words, the Americans are serious when it comes to reform. As for the Israeli side, Rice warned that if Sharon doesn’t take the tough decisions necessary for peace, he could find himself out of a job. “If the current Israeli government isn’t willing to make those decisions and the Israeli people want to make those decisions, they have a mechanism for actually changing the government,” she said. Sharon finds himself under pressure not only from the Americans, but domestically as well. As Israel’s economic situation worsens, pressure is growing on Sharon to take radical action — whether military or political — to end the intifada. An editorial in the Ma’ariv newspaper this week pointed out that if the economic situation worsens significantly, Sharon will not be in any position to maintain hard-line policies. Sharon is also under political pressure from the Labor Party, which includes Ben-Eliezer. Foreign Minister Shimon Peres, for example, is strongly in favor of provisional Palestinian statehood, while Sharon has deep reservations. Peres believes offering the Palestinians even a provisional state is the only way to rekindle their hopes for peace. Sharon believes a provisional state would not stop terror, but would make it far more complicated internationally for Israel to move into areas under Palestinian control, as it does today, to seek out terrorists. These differences could spill over into an early showdown between Sharon and Labor, because Labor voices calling for a pullout from the national unity government are growing. Many Labor legislators say that if Sharon does not present a “peace horizon” with the Palestinians within the next few weeks, Labor should leave the government. These calls are likely to come to a head at the party convention in early July. Ironically, starting work on the security fence — a fence neither of them initially wanted — could be one of the last acts of cooperation between Sharon and Ben-Eliezer.