RAMALLAH -- "We've come a long way, baby," the middle-aged and middle-class Palestinian said in American-accented English, relishing the irony of applying Madison Avenue's pitch to women's rights to the demonstrations against Israel's occupation of the West Bank and Gaza Strip.

"When Golda Meir was Israel's prime minister she used to say the Palestinian people didn't exist," chimed in a similarly aged woman who volunteered that only six months earlier she had all but abandoned hope of seeing meaningful change in the foreseeable future.

Neither he nor she, or many others over 25, has taken an active part in the protest demonstrations that began Dec. 9, much less the stone throwing, which has been almost exclusively the work of young boys, some only eight or 10.

But with each passing day, that often reckless confrontation with Israeli troops staged by the "occupation generation" -- those who have known nothing but Israeli rule -- is changing the way all Palestinian generations think of themselves.

Latter-day Arab Rip Van Winkles, the Palestinians have yet to focus on the hard questions of how to translate this grass-roots protest movement into a coherent political strategy. Nor do they seem concerned over what to do about indications that their protest is hardening Israeli public opinion behind right-wing candidates in an election year.

For the moment, success of the protests is a source of euphoria, and the implications for the future are for another day.

It is enough, for them, that the days are gone when West Bankers and Gazans found themselves wanting while following the kamikaze exploits of young Lebanese Shiite Moslems, who won international attention by staging suicide bomb attacks against the Israeli Army in southern Lebanon.

Gone, too, is that sense of helplessness engendered by Israel's invasion of Lebanon in 1982, which, whatever else then-defense minister Ariel Sharon intended it to accomplish, set out to destroy the Palestine Liberation Organization politically and prevent negotiations over the West Bank and Gaza Strip.

Not since Egyptian troops crossed the Suez Canal at the start of the 1973 Arab-Israeli war has there been such a surge of pride and self-respect in the Arab world, especially now among the 1.5 million Palestinians who, since the Arab-Israeli war of 1967, have lived under Israeli occupation.

In conversation after conversation in this West Bank town and others, common Palestinians expressed their surprise and delight that, as one man said, "our lives of desperation" are over.

They are especially proud that people abroad have been made aware of the Palestinian plight through the efforts of their young men -- and not through those of a long-indifferent outside world, which they feel had written them off.

Threaded throughout a dozen conversations is also the knowledge that rocks and knives are proving effective against an American-equipped Army that prides itself on being the fourth most powerful on Earth.

Mindful of the impact of television pictures throughout the world, one West Bank resident remarked, "Finally, we have destroyed that favorite Israeli myth of portraying themselves as David against the Arab Goliath."

Over the years, the Palestinians have come to lose their respect for an Army that cowed their parents. "People see Israeli troops buying hashish in refugee camps, drinking and going with women. They see that they can be bribed. They are ordinary human beings with weaknesses," said philosophy Prof. Sari Nusseibeh of Bir Zeit University on the West Bank.

Since the disturbances began, Palestinians also say they have seen how isolated, small groups of Israeli soldiers can become terrified when faced by determined demonstrators.

And gradually, West Bankers and Gazans appear to be overcoming their traditional inability to outsmart relentless Israeli intelligence penetration and operate an effective underground organization.

In recent days, carefully edited and handsomely printed tracts have appeared with specific instructions that bespoke organization. For example, a call for a general strike spelled out what was expected for different categories of workers -- bus or taxi drivers, merchants, grocers, pharmacists.

Solid, middle-class Palestinians appear outwardly unconcerned about exactly which forces are behind the phantom organization issuing instructions in what would appear to be the PLO's name.

The shadowy organization calls itself the Palestinian Nationalist Institutions and Personalities from the West Bank and Gaza and endorses standard PLO positions seeking an international peace conference and an independent Palestinian state.

There is much speculation, however, about the relative strengths of the emerging Moslem fundamentalists of Islamic Jihad (holy war). Especially in Gaza, the group has been competing successfully for followers against longer-established Palestinian political organizations, and on the West Bank its influence appears to be growing as Jordan's clout wanes.

Those few Palestinians who in the past sought a middle road, prodding a long-dormant society into envisaging political compromise alongside like-minded Israeli doves have found themselves isolated amid the current protest fervor.

For the moment, Palestinians are basking in their new-found sense of unity. West Bankers no longer look down their noses at their once all-but-forgotten Gaza cousins, since it was the Gazans who showed the way last month.

Yet there is a remarkable lack of triumphant thinking. "We shouldn't expect too much," one West Bank businessman said. "If it brings political maturity, power through cooperation, making us feel as one people, what a change from the days when we used to say that getting 10 Palestinians together meant listening to 10 opinions."

Obviously, the Palestinians under occupation hope that somehow the current protest will be translated into a political victory, but, as one woman said, "we don't have great expectations because we know Yasser Arafat and the PLO are handcuffed by Arab governments."

"Whatever happens, we are still a step closer to a solution," a merchant remarked, explaining that "the uprising," as he called the protests, has sidetracked Jordanian, American and Israeli dreams of deciding the fate of the occupied territories without Palestinian representatives or consent.

"The man in the street makes the V-for-victory sign and says, 'Go talk to my leadership,' " said newspaper editor Hanna Siniora, making clear he meant the PLO. Siniora was one of five Palestinian journalists arrested by Israeli authorities last week.

"First the Israelis used to say we wouldn't negotiate with them, then when we got a leadership they wouldn't negotiate with it," said a Ramallah matriarch. "Now, even we don't know who is really organizing the uprising, and we don't care. Now it's Israel's problem."