TO SAY THAT Yasser Arafat was the embodiment of the Palestinian national cause, as many of his obituaries did, is true enough -- but it is also unfair to those he leaves behind. The people of the West Bank and Gaza Strip are among the most able, educated, entrepreneurial and politically sophisticated of the Middle East; they are more than capable of creating the peaceful and democratic state that President Bush and the United Nations have proposed for them. Mr. Arafat did more than anyone else to forge their national identity as Palestinians and to place their cause at the center of global affairs. But he also poisoned his movement with terrorism and sabotaged it through his refusal to embrace the settlement with Israel that was possible years ago. Unlike many of his followers, Mr. Arafat was autocratic, corrupt, deceiving and, ultimately, unwilling to unambiguously accept Israel's permanence. His death has prompted an understandable outpouring of grief from Palestinians, including those who fiercely opposed him. But it also removes the single largest obstacle to the achievement of Palestinian sovereignty.

The immediate consequences of his passing could be tumultuous. Though Palestinians may unite around a collective interim leadership, the potential exists for a prolonged and possibly violent power struggle among the fragmented array of leaders and factions in the West Bank and Gaza, who range from secular democrats to militant nationalists and Islamic extremists. Yet two of the men who have assumed leading positions in the Palestinian Authority and the Palestine Liberation Organization, Ahmed Qureia and Mahmoud Abbas, are moderates committed to a peaceful settlement with Israel; both unsuccessfully attempted to implement President Bush's "road map" to an Israeli-Palestinian accord, over the objections of Mr. Arafat. Moreover, Mr. Arafat's death triggers a legal provision requiring an election for president within 60 days, in addition to the municipal elections in the West Bank and Gaza that the Palestinians were already planning. A democratic vote, the first for Palestinians since 1996, could serve to empower a new leadership with a genuine popular mandate.

Whether Palestinians pursue this hopeful course or succumb to anarchy and violence depends to a large degree on how Israel, the United States and the rest of the Arab world respond to Mr. Arafat's death. Israeli Prime Minister Ariel Sharon has been pursuing a plan to unilaterally redraw Israel's borders and fortify them with a security fence, while postponing negotiation of a Palestinian state indefinitely. Until now the Bush administration has backed him and effectively suspended its efforts to advance the road map. If these policies -- based on the notion that Mr. Arafat was not acceptable as a negotiating partner for Israel -- remain unaltered, Palestinian moderates will have scant foundation to establish their authority. Conversely, a vigorous effort by the United States and allied Arab and European governments to promote a democratic process to choose a new leader, and a genuine offer by Israel to quickly resume negotiations on the basis of the road map, could open the way to a responsible Palestinian administration and, conceivably, a breakthrough toward an Israeli-Palestinian settlement. Coming just after the U.S. election, Mr. Arafat's passing offers an enormous opportunity for positive change in the Middle East. Mr. Bush acknowledged on Wednesday that the opening exists; it is crucial to U.S. interests in the region that he exploit it.