GAZA CITY, July 22 (JTA) — The reality of the Gaza Strip, it appears, is in the eye of the beholder. Some officers of the Israel Defense Forces and the Palestinian Authority security organizations think it´s a simmering cauldron bound, sooner or later, to boil over. Others call it a model of how Israelis and Palestinians can live adjacent but separate lives. While it´s the center of a burgeoning cottage industry of arms building and smuggling, Gaza has produced no suicide bombers, Israeli security sources say — primarily because a fence around the area prevents bombers from crossing into Israel. For its part, the Palestinian Authority is searching wildly for ways to include rejectionist groups such as Hamas and Islamic Jihad — which are strongest in the Gaza Strip — without having to confront them in armed clashes. In the meantime, Israel bites its nails while it waits for the end of the three-month hudna, or cease-fire, that the main Palestinian terrorist groups have declared. The cease-fire is due to expire in late September — at which time, as one IDF officer put it, "the real show begins." Hamas reportedly is using the cover of the cease-fire to build an arsenal of 1,000 Kassam rockets that can fly a greater distance and carry a warhead, a senior IDF officer told JTA. That has sparked concern that, should hostilities resume, "the opening of the next phase in the conflict will be much more violent," an IDF brigade commander in Gaza said. The materials to assemble the rockets are smuggled under the Egyptian border through tunnels underneath Rafah, the major city in the southern Gaza strip. From there, the senior IDF officer said, the weapons and bomb components are driven north along Tancher road — the strip´s main north-south axis, which recently was reopened to Palestinian traffic — to Khan Yunis or Gaza City. There, the senior officer said, Hamas is working on a new version of the Kassam that could reach about 10 to 12 miles, putting cities like Ashkelon and Netivot within range. Some of the tunnels — whose "engineers" earn a handsome profit from material smuggled under the border — are believed to lie as much as 80 yards underground. "Unfortunately, their digging of tunnels is much faster than our ability to stop it," the senior officer said. Israel demands that the Palestinian Authority disarm the terrorist groups, destroy the Kassam lathes and arrest militants, as called for under the "road map" peace plan. For years it has said that the P.A. security forces are strong enough to do the job. That perception increasingly is being challenged. Asked whether the balance of weapons in the Gaza Strip tilts towards the rejectionist groups or the Palestinian Authority, an IDF brigade commander hesitated for a moment, then noted that — given the accelerated weapons smuggling believed to be underway during the cease-fire — the rejectionist groups might well achieve the upper hand. "There have been so many arms smuggled in. We can tell by the sheer number that we capture that there must be much more that we don´t" capture, he said. "In my view, there are simply more weapons in the hands of the rejectionist groups than the P.A." For months, Israeli security sources have said that the Palestinian Authority has some 20,000 security personnel in the Gaza Strip alone. "They are armed, have enough jeeps and cars, enough ammunition and enough courts to arrest those men and take them to court," the senior army officer said. In private, however, IDF officials quote figures closer to those given by Palestinian security chiefs — perhaps 12,000 men under arms. Many of them are not nearly as motivated as their counterparts in Hamas, Islamic Jihad and the Al Aksa Brigades. Pressed by reporters, the IDF brigade level commander — who works closely with his Palestinian counterparts in the field — admitted that, in an all-out battle, the Palestinian Authority might lose to the terrorist groups. "The P.A. is aware of this," he said, "and so the challenge for the Palestinians is to disarm the militant groups peacefully. The P.A. believes that it can only resolve" the issue "by including Hamas in government." The P.A.´s National Security Service, or NSS, the apparatus tasked with disarming Hamas and Islamic Jihad, is aware of the challenge. "It´s impossible to disarm Hamas," said Brig. Gen. Sa´eb Ajez of the NSS. "We can understand that they don´t want a solution" to the conflict with Israel, "but our chronic weakness is the question of how to disarm or arrest them, especially in the past two years." Yet Ajez notes what he calls some positive developments: The deal that P.A. Prime Minister Mahmoud Abbas negotiated with Hamas and Jihad stipulated that the Palestinian Authority would not actively hunt militants, but would work to prevent attacks. "More than that, there is little we can do," Ajez said. At least, the cease-fire has brought some respite for Palestinian motorists who now are able to travel on the Tancher road without being detained for hours at checkpoints, Ajez said. More farmers now can reach their fields, though they still fear being mistaken for militants, Ajez noted. The most startling development is occurring in towns next to Gaza´s border with Israel: In Rafah last week, Ajez said, local residents pummeled terrorists who were attempting to set up a mortar to fire into Israel. Mortar attacks often bring an Israeli military response against the launching area. For now, the Israeli brigade commander says, a tenuous coexistence reigns in the strip. Motioning toward the traffic flow along the Tancher road at the Katif junction, he called it "a great example of how to implement separation." Israeli settlers travel on a bridge that bypasses the road, reducing friction between settlers and Palestinians almost to nothing. The Gaza Strip is a particularly good place to observe "separation at work," the brigade commander said. The 211 square mile area has a "clearly demarcated and operating security fence. This allows all efforts to be made by both sides to prevent terrorists from leaving the strip." A definitive separation allows for communication and, therefore, cooperation between Israeli and Palestinian security officers along the separation fence, where Palestinian and Israeli outposts watch for potential infiltrators. Asked how he approaches the next few months, the officer said, "Well, I suppose with cautious optimism."