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ISRAEL FUTURE JEOPARDIZED BY AN UNWORKABLE SYSTEM

Large questions sometimes have petty answers, and this is one of them. How, despite powerful domestic opposition and universal international disapproval, do hard-line Israeli politicians manage to evade the issue of trading for peace year after year and hang onto the occupied Arab territories?

With the Palestinian intifada entering its 30th month, Prime Minister Yitzhak Shamir has launched a new crash program to build further Jewish settlements in the occupied Arab territories. Everybody knows that these lands must eventually be handed back if Israel is ever to have peace. Yet the program goes ahead.

Shamir's own behavior is understandable enough. He is an honest imperialist who believes in a greater Israel: The Palestinians will just have to make way for it. But most Israelis are not obsessed with land for its own sake. How does he get away with it, when the potential damage to Israel is so immense?

Time is not on the side of peace. Arab leaders who now back peace with Israel all face the danger of being overthrown by militant Islamic fundamentalists who vow to fight Israel forever.

A peace agreement might save these Arab regimes. Even if it did not, it would put their successors fatally in the wrong, since they would have to tear up internationally guaranteed agreements in order to re-open the quarrel with Israel. Legality matters a lot more in today's world than most people realize, and it is likely to matter even more in tomorrow's.

The strategic value of the occupied territories has dropped drastically in the past few decades, as long-range weapons have come to dominate military equations. In any case, any Palestinian state would be legally demilitarized -- and, in all probability, permanently supervised by both American and Soviet troops operating under the U.N. flag.

The central problem is that the Israelis are stuck with an electoral system that lets extremists like Shamir set the national agenda.

Israel has the purest system of proportional representation in the world, in which any group of 25,000 like-minded people can elect a member of the Knesset.

This is why there are 15 different parties in the present Knesset, with most of the smaller ones being single-issue fanatics on one topic or another. Some of them will sell their votes to any government that agrees to impose their particular obsession on their fellow countrymen.

So all Israeli governments are coalitions. Sometimes Likud and Labor, the two major parties of right and left, form a grand coalition. But these coalitions survive only by avoiding all decisions on the vital questions of peace and land, on which Likud and Labor profoundly disagree.

The other kind of coalition is one in which Likud, whose own obsession about land makes it even less scrupulous about making deals with the various fringe fanatics, forms a narrow and shaky coalition of its own. This is what Shamir has recently achieved and we may expect more evasive formulas for peace talks that never actually happen, more Jewish settlements in the Arab territories, and more lost time that may never be recovered.

Shamir's policies do not have the support of a majority of Israelis, but until they can reform their own political system they are likely to be stuck with them. It is a source of some hope, therefore, that they are finally starting to rebel against the lunacies it entails.

One hopeful sign was the decision by the Israeli Supreme Court on May 8 that in future all the shabby promises, deals and financial concessions that go into a coalition deal must be made public. Even more hopeful is the rise of a protest movement demanding electoral reform.

The fear is that by the time reform actually occurs, it may be too late for peace.

GWYNNE DYER, a native of Canada, is a political commentator based in London, England.

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