1.   The episode distressed many Palestinians, who said they would have understood demonstrations against Israel or over the decision to delay statehood.

2.   They fear an extended interim period is an Israeli maneuver to delay real statehood.

3.   Arafat asks for official U.S. proposal to delay statehood.

4.   However, if Arafat were to delay statehood too long, he could suffer huge damage to his credibility among ordinary Palestinians, who share his dream.

5.   The letter is intended as compensation to the Palestinians for delaying statehood.