With the collapse of his latest peace initiative with King Hussein of Jordan, Yasser Arafat of the Palestine Liberation Organization now appears more isolated than ever before in his long career as one of the Middle East's most successful survivors.

In blaming the failure squarely on the PLO leadership -- and largely exonerating the United States -- the king proposed no new ideas in his speech Wednesday night. He preferred to plead that once again he had done his best and had been badly let down, as he put it, so "close to the finishing line."

At this stage of disarray in the Arab world, Hussein apparently felt that it was up to others to come up with new ideas and that events would take care of themselves for the time being.

Already, both the Egyptians and the Israelis have reacted predictably, the former insisting that Hussein had not actually broken with Arafat, the latter hailing his courage for having done so.

No comment was forthcoming from Syria, but none was necessary. President Hafez Assad has made no secret of his opposition to the plan and his unabating hatred of Arafat.

Hussein's encyclopedic recapitulation of events seemed designed to make Palestinians conclude that either they should persuade the PLO to change policies or they should change leaders.

His message was beamed especially at Palestinians in the West Bank, because they have been living under Israeli occupation for more than 18 years and because Jordan administered the territory from 1948 to 1967.

But it is easier to formulate the problem than to solve it, even in these days of declining PLO influence.

Over the past three years, two failed joint initiatives -- and perhaps permanently unbridgeable splits within PLO ranks -- have shown the constant ebbing of Arafat's power since the Israeli invasion of Lebanon in 1982 forced him out of Beirut.

As Hussein recalled in his speech, the days when the PLO in effect set the Arab world's diplomatic agenda are long gone. But, whatever his ever more manifest failings, Arafat remains the symbol of Palestine for a nationalism that shows little sign of waning.

Moreover, many Palestinians, both inside and outside the Israeli-occupied West Bank and Gaza, are convinced that Arafat was right in refusing to recognize the key U.N. Security Council Resolutions 242 and 338.

For despite the major concessions Hussein said he extracted from the United States, and presumably from its Israeli ally, recognizing those resolutions meant recognizing Israel's right to exist -- in exchange for the return of Israeli-occupied land but without any mention of the Palestinians' right to self-determination.

That remains a right that Palestinians feel that they -- almost alone in the contemporary world -- seem destined to be denied.

Even if West Bank Palestinians did want to strike a deal with Jordan and Israel without the PLO, few Middle East specialists think that representative leaders would have the moral and physical courage to do so.

It was easy enough for Israeli Prime Minister Shimon Peres to hail the king's speech and call for West Bank residents to join direct talks with Jordan and Israel. But Jordanian officials have made it clear that there is no question of Hussein's going it alone.

For the West Bank residents, the danger in such a course is not only the presence of killers sworn to punish any such "treason."

The real problem, which Palestinians both under Israeli occupation and in the diaspora talk about increasingly, is how to replace Arafat and his tired team.

An attentive reading of the king's speech does not suggest that he, any more than the West Bank residents, dares take that potentially fatal step for the Palestinians.

The first reaction of both the Arafat loyalists and the dissidents who broke with him three years ago at Syrian urging was to welcome the king's speech as a chance to heal their rifts.

As so often in the past, guerrillas of all PLO factions seem more interested in keeping their increasingly rickety organization together than in achieving some form of national homeland for their long-suffering fellow Palestinians.

And, for better or worse, few Third World leaders seem inclined to retire gracefully, especially not the Arafats who know just how wide of the mark they have fallen.