The Israeli government bombed Palestinian targets for a second-straight day Dec. 4, hitting a police station just yards away from where Palestinian leader Yasser Arafat was working. The strikes come after a spate of suicide bombings last weekend that killed 25 Israelis.

Israeli Prime Minister Ariel Sharon has declared a "war on terrorism" and said he holds Arafat responsible for recent and future attacks on Israelis. While the Israeli government has always been wary of Arafat's intentions, Sharon now considers Arafat a greater threat than Islamic extremist groups such as Hamas or the Palestinian Islamic Jihad.

Israel's strategy in the coming months will be to maintain military pressure on the West Bank and Gaza Strip, which will lead to more attacks by extremist groups. It will also reduce Arafat's relevancy with regard to the conflict, weakening his legitimacy at home and abroad. In the end Sharon would rather fight a war with extremists than lose Israeli territory through negotiations with Arafat.

Sharon's goal of destroying Arafat's power base is ironically similar to that of Hamas and the Islamic Jihad. By keeping the conflict hot, both Israeli and Palestinian hard-liners are removing any possibility of a negotiated settlement. Both sides think they can eventually control all of Israel, but they first need to remove the Palestinian Authority.

Blaming Arafat for terrorist attacks is more about politics than military reality. Arafat has significant political and military power, but he does not control the operations of radical Islamic groups. His security services also do not appear strong enough to completely suppress them.

By putting the responsibility to stop anti-Israeli attacks squarely on Arafat's shoulders, the Sharon government is trying to marginalize Arafat and the Palestinian Authority. This will clear the way for radical Islamic groups to take the helm of the Palestinian movement.

Such extremists would be more than happy to see the Palestinian Authority dismantled as they see the group as betraying their cause. The PA wants to coexist with the state of Israel. Hamas wants to destroy it.

The Sharon government would actually rather deal with a group like Hamas than with the Palestinian Authority. The PA is militant, but at heart it is a nationalist movement, respectable under international norms. Hamas is more dangerous but is founded on extremist views that are decidedly unpopular among most governments post-Sept. 11.

Although an upsurge in violence would result if Hamas or Islamic Jihad were to gain more power, it would shatter international sympathy for the Palestinian cause and mothball plans for a Palestinian state.

In the near term, the Israeli government will argue that it must continue military attacks against Palestinian targets in order to defend its citizens. Hamas or the Islamic Jihad will then retaliate for those attacks and plan more operations. Arafat will continue to be unable or unwilling to control the Islamists, and this will reduce his credibility as the leader of the Palestinian movement.

While Arafat's standing will drop internationally, it will also fall among Palestinians as well. He has already been unable to stop the Israeli blockades that make economic activity nearly impossible, and he does not provide health clinics and schools like the Islamic groups do.

Arafat essentially wants to make a deal with the Israelis rather than exterminate them. As such he inhabits an uneasy middle ground between the Israeli government and the radical Palestinians. And both Sharon and the radical Palestinians are moving to shrink that ground as much as possible. As they do, they hope to force Arafat to take a side. But no matter what side he chooses, Arafat loses.

He can join forces with radical groups, but doing so would severely damage his international credibility. It would also allow the Israeli military to declare open warfare on his organization.

Throwing in his lot with the Israelis against the forces of militant Islam is a slightly more likely option. Arafat could arrest scores of Palestinian militants and share intelligence with Israeli security services. But the type of cooperation that the Israelis would demand would likely lead to a backlash from Palestinian Islamic groups — in effect, a Palestinian civil war.

Both of these options are equally unappealing to Arafat, and he is trying to avoid them as best he can. His plan is to bide his time until conditions around him change.

The Israeli government will do its best to make it difficult for Arafat to wait. It will continue attacks on Palestinian targets. And it holds one last card: It can deport Arafat and his lieutenants from Israeli-occupied territory. Deportation would be political death for Arafat, and the mere threat of it could force him to take a side.

The Islamic Palestinians will also pressure Arafat by escalating their campaign of violence, making Arafat look unable to control the suicide bombings and sniper attacks. The Sharon government and radical Palestinians are betting that they have enough time to erode Arafat's position past the point of no return.

Nathan Brown is an analyst with STRATFOR, the global intelligence company. For more information about STRATFOR, click here.