It is possible that one or more American passengers, and perhaps others, have been killed on the hijacked Italian cruise ship -- an incident redolent of cinematic possibility but ugly in its essence all the same. Certainly no one will doubt the readiness of the terrorists to murder unarmed civilians in cold blood. These people, who hijack planes and boats and put bombs in marketplaces -- acts invariably targeted on unoffending people, of various nationalities -- evidently think they are helping the Palestinians' cause. They are not.

The latest gang demands that Israel release some 50 Palestinian prisoners. The top name on the list is that of a terrorist convicted for killing a father and, by smashing a rock on her head, his 5- year-old daughter: a hostage-killer and a child-killer. Israel is currently convulsed with remorse at having agreed in May to release 1,150 mostly Palestinian prisoners to reclaim three Israeli soldiers. The release is widely thought to have encouraged would-be terrorists to conclude that the worst that could happen to them would be to be captured and held for a while before another prisoner exchange. The notion that Israel would agree now to a new exchange betrays a low political understanding on the part of the hijackers.

The PLO's Arafat wing disavows this incident. This is interesting. When three Israelis were killed in Cyprus recently, a telephone caller in Jerusalem claimed it was done by the PLO's "Force 17" while the PLO hierarchy denied responsibility. Who is to be believed? An analysis in The New York Times last week noted that Yasser Arafat's "Al Fatah guerrilla organization has taken responsibiity for hundreds of attacks on Israeli military and civilian targets since the late 1960s. In the mid-1970s, while Mr. Arafat was at the height of his campaign to gain world recognition for the PLO, he secretly directed the Black September organization through his aide, Saleh Khalef, also known as Abu Iyad. It was responsible for some of the most notorious terrorist attacks ever made on Israelis inside and outside their country." The record puts Mr. Arafat under a burden to show, with more than occasional disavowals, his rejection of terrorism.

He could demonstrate it best, of course, by stating outright that Palael. These words would catapult Israel into its first serious debate on peace. We are under no illusion that the moment is ripe for such a sequence. Especially in moments of threat and death, however, it is important to keep in mind the alternative.