In a Jan. 8 column, Charles Krauthammer argues that under present circumstances Israel must retain the West Bank and Gaza. He argues that the Palestinian leadership is unwilling to coexist with Israel, and states that "{Yasser} Arafat and the PLO say explicitly that recovery of the West Bank is simply stage 1 of the struggle to liberate all of Palestine."

Krauthammer is wrong. That is not the PLO position. The PLO is prepared to live at peace with Israel. The real issue is not what the PLO says or wants but how Israel's national security would be affected by relinquishing the occupied territories. Common wisdom notwithstanding, Israel would be stronger and safer without the territories.

Last June I was part of a Jewish delegation that met with Arafat. In our discussion he repeatedly stressed his desire for peace negotiations with Israel. In follow-up discussions with Farouk Khaddoumi, the PLO foreign minister, we specifically raised the issue of "stages." We asked, "If negotiations were to lead to the creation of an independent state on the West Bank and Gaza, would this mean the end of armed conflict?" He responded with an unambiguous "yes." He further offered to put that in writing.

The same message can be seen in Arafat's public positions. In February 1985 Arafat and King Hussein of Jordan signed an agreement to seek negotiations with Israel based on the principle of "exchanging land for peace."

In 1986, the PLO offered to accept United Nations Resolution 242 -- if the United States would recognize the Palestinian right to self-determination. Resolution 242 affirms the right of all states in the region to live at peace. Acceptance of 242 is universally seen as acceptance of Israel's existence. Unfortunately, the United States in effect refused to recognize a Palestinian right to self-determination, repudiating the 1947 U.N. Partition Resolution that called for a Jewish state and a Palestinian state.

Recently, Arafat was quoted in the Jerusalem Post as saying, "The people of Israel must be made to know that you can't simply eliminate 5 million Palestinians and ignore their national rights, just like you can't get rid of Israel. We must strive for a just solution, for the good of both peoples, and live in peace."

As important as these statements are, one cannot expect Israel to make major national security decisions on the basis of what Arafat says or does not say. The main issue is the national security situation Israel would face if it gave up the West Bank.

Much fuss has been made over the fact that without the West Bank, Israel would be 10 rather than 40 miles wide. In an era in which planes and missiles can cover 40 miles in two minutes, this difference has been vastly overrated. Israel was 10 miles wide in the 1967 war and even less wide in the 1948 war. On both occasions it faced the combined forces of Egypt, Jordan and Syria and gained decisive victories. Today it is infinitely stronger. Its nuclear arsenal alone guarantees that no Arab state can overrun Israel without committing suicide.

The central reason a Palestinian state on the West Bank would be no threat to Israel is that it would be a mini-state, roughly one-quarter the size of Israel. It would be completely enclosed by Israel on one side and Jordan on the other. Its economy would be dependent upon Israel. And no military supplies could reach it without first passing through either Jordan or Israel.

Most important, tiny vulnerable states do not start wars with powerful neighbors. What would happen if there were such a war? Clearly, the Israeli objective would be permanently to eliminate such a state. Israel would not be willing to reinstate its occupation; rather, it would expel the million or so Palestinians once and for all. (Indeed, even today, under conditions of relative peace, a growing number of Israelis are calling for their expulsion.) The leaders of any future Palestinian state would be all too aware of these realities -- having so much to lose, they would be very careful.

Moreover, a peace settlement would provide for the demilitarization of the West Bank and, perhaps, security guarantees from the United States. Indeed, if Israel wanted it, it could probably get a mutual defense pact with the United States. A peace settlement with the Palestinians would also solidify the Israeli-Egyptian peace and yield a treaty with Jordan. Over time, it might even allow for true reconciliation.

Consider the alternatives. Recent events have shown that Israel's holding on to the territories will further radicalize the Palestinians. And most ominously, continued violence threatens to draw the 700,000 Arab citizens of Israel into a downward spiral of extended civil war and greater tragedy.

Peace in the Middle East is not a pipe dream. It can be attained. But it will not be achieved so long as Israelis and their American friends cling to long-outdated visions of Israeli vulnerability and Arab hostility. It is time to catch up with reality.

Jerome M. Segal

The writer is a research scholar at the Center for Philosophy and Public Policy at the University of Maryland. He recently represented Jews for Israeli-Palestinian Peace in meetings with the PLO leadership.