With four days left before this dusty, forlorn former capital of the Sinai is handed over to Egyptian control, ending 12 years of Israeli occupation, the metamorphosis is already almost complete.
From all outward appearances, El Arish has jumped the gun on Sunday's ceremonial exchange and has become, almost overnight, an Egyptian city.
Arab workmen are feverishly redecorating the old water authority building overlooking the Mediterranean, plastering over machine gun pockmarks left from the 1967 war and transforming the sprawling villa into a temporary palace for Egyptian President Anwar Sadat when he arrives Saturday for the formal handover.
Armored cars are shuttling to Tel Aviv with bags full of Israeli currency, and Egyptian pound notes are being trucked in from the other direction.
Bedouin herdsmen are lined up at makeshift processing centers, surrendering their Israeli identity cards and registering for new ones issued from Cairo. Egyptian license plates are a common sight in the sand-swept streets and the tricolor flag of the Arab Republic of Egypt is quickly replacing the blue-and-white Star of David everywhere in town.
The Israeli Air Force squadron insignias at El Arish's tiny airport have been obliterated with black spray paint, and the gaping hole atop Egypt's pylon memoralizing its 1948 war dead has been filled with a shining new eagle to replace the one torn down in less peaceful times.
An orgy of painting has swept El Arish. Once-grimy shops and houses have been hastily covered with soft pastel blues and purples. Banners extolling the "hero of peace" emblazon the town, and gaudy handpainted portraits of Sadat have sprung up seemingly at every corner.
But beneath the euphoria and carnival-like atmosphere of this economically depressed ancient caravan way station is an undercurrent of uncertainty and some lingering transition problems that are likely to haunt the people of El Arish for months - and possibly years - to come.
Among the disputes that have not yet been resolved in a week of meetings by a joint Egyptian-Israeli transition commission are issues that seem to be at the heart of the normalization of relations betweeen the two countries.
Chief among them is the question of whether some 5,000 El Arish workers who have been employed in Israel will be allowed to continue to cross the border to work there after Sunday, or whether they will join the town's already swollen unemployment rolls.
The dispute flared into the open today with Foreign Ministry officials in Cairo quoted as saying the Jordan would be closed. Israeli Prime Minister Menachem Begin told reporters, however, that he was certain that it would be open.
The question is of no small concern to the 35,000 residents here, because virtually every family in El Arish has somebody who either worked in day labor jobs in Israel, or was employed by the military government during the occupation.
In the newly painted Bedouin Sports Club where soccer and ping pong are mixed with politics and men-only coffee klatches, a half dozen Bedouins yesterday talked about the problem switching back and forth between broken English and a little bit of Hebrew they have picked up from Israeli soliders.
Because the time is not just right for calling attention to their links with Israel, the youths spoke anonymously, at first expansively predicting an employment boom in El Arish with the return of the Egyptians, and then revealing their concerns about their access to Israel being shut out.
"I hope the situation will continue as it is. We want contacts with Israel not only for work, but for all kinds of things, including sports," said one club member, wearing the traditional Arab headdress and carrying a herdsman's staff.
Another said, "With God's help, the government will not close the border. We would like to continue working in Israel. But this is peace. We need open borders. That's all there is."
Egyptian negotiators appear to be in no hurry to open the border immediately, saying the treaty provides that such normalization will occur after the nine-month phased withdrawal from approximately half the Sinai Peninsula.
The head of the Egyptian delegation, Brig. Gen. Seif Abu Shanaf, said however, that Egypt would do nothing to hurt the El Arish residents, livelihood, and sources from both sides said Sadat and Begin will discuss the issue when they meet here Sunday.
Also to be resolved is the question of whether Egypt will allow El Arish farmers to cultivate land they own in territory that will remain under Israeli control until the withdrawal is complete, and whether fishermen here will be able to sell Israel fish from the Bardawil Lagoon along the Meditarranean west of here.
Enmity toward the Israelis has been conspicuously missing here, in contrast to 1956, when Israel returned the town to Egypt after occupying it for 2 1/2 months as a result of the Sinai war.
Since Sunday, entrance to the two has been restricted to authorized Army personnel and journalists, and armed patrols have virtually vanished. Israeli reporters strolling through the main streets are often greeted with handshakes and cries of "shalom." T-shirts bearing portraits of Sadat are fast sellers with Israelis.
While the townspeople are graciously seeing off their occupiers of the last 12 years, the Egyptian government has brought in some 300 former El Arish residents who fled the Sinai in 1967. They reportedly will be appointed topublic jobs. Moreover, former officials who stayed have but refused to cooperate with the Israeli government also are expected to be given jobs over those who worked with the military government.
Col. Avraham Markus, Israeli police commander of the Gaza Strip and Northern Sinai, said law enforcement transfer was going smoothly, and that he assumed El Arish residents arrested for crimes by the Israeli-directed force would be prosecuted under the new administration.
For centuries, El Arish has been the smuggling capital of the Sinai - dealing mostly in hashish in recent years - and Markus said he hoped the Egyptians would cooperate with Israel in stemming drug traffic between the two countries.
He also noted that stolen goods from Israel have been pouring into El Arish, which is now considered by underworld fencing operations as a sudden haven. Police already have found eight cars buried in the desert, and, the police commander said, "We don't know how many more are out there covered up by sand and waiting to be dug up."
Shopkeepers along main street, who have become used to stocking their stores with Israeli goods, said in interviews they were not concerned about an abrupt cutoff Sunday. One paint store owner, opening his account ledger to May 27, said, "Here, I stop. After, it will be a new book." He said he will buy from Cairo.
Faced with a possibility of shortages of essentials, the Egyptian government is planning to send a convoy of food to El Arish on Friday to last until regular supply lines can be established.
In the meantime, Egyptian and Israeli counterparts who are specialists in utilities, postal services, law, telephones and other areas of public services are rehearsing for Sunday when Begin and Sadat transfer control of the town, shake hands and officially make Al Arish Egyptian again. CAPTION: Picture, Joyous Arabs waving Egyptian flags recently drove through El Arish in the Sinai to celebrate the upcoming transfer of the city from Israeli to Egyptian control. UPI