No crowds of well-wishers massed Thursday outside the Mukata, the mostly ruined compound where Yasser Arafat has been confined for the past two years. Only a throng of reporters assembled, peering through the smoked windows of sedans carrying officials to a frail old man who still embodies the national aspirations of many Palestinians.

As Arafat battled a still-undisclosed illness inside the compound's high walls, his neighbors here in the Palestinians' political capital expressed deep concern and sadness, but also hope that something better might be imminent after years of what some called his brave failure to achieve an independent state. But many appeared baffled by the events unfolding only blocks away from the shwarma stands, street vendors and grocery stores where they exchange news; for them, the drama might as well have been playing out in another country.

"People are very worried about what is happening, and we are only now finding out things," said Sami Farah, 35, from behind the counter of his father's busy corner grocery. "Is this serious? Or is it not? We really don't have any idea."

Some of Arafat's more ardent followers said the focus on the Mukata was a depressing reminder of a more promising time for its 75-year-old tenant. When Arafat ended years in exile after the signing of the Oslo peace accords, thousands greeted him on his first visit to Ramallah on Dec. 30, 1995.

"I was there that day to greet him," said Wahabe Shaheen, 46, a blacksmith from the nearby town of Ariq.

As far back as 1964, Shaheen recalled, he had listened raptly as Arafat spoke on radio and television about Palestinian statehood. But he had never seen him in person. When Arafat arrived in Ramallah, Shaheen and hundreds of others crowded into the Mukata's walls and celebrated with him what seemed like a lasting triumph.

In 1996, Arafat was elected president of the Palestinian Authority, created to administer cities in the West Bank and Gaza Strip once Israeli troops pulled out as planned. The Mukata became the seat of Palestinian political power.

But in the years since, the Israeli military has bombarded the complex and rolled tanks through Ramallah's narrow streets, apparently as punishment for Arafat's inability or unwillingness to stop Palestinian suicide bombers from striking Israeli targets.

On Thursday, media scaffolding rose in the front yards of houses around the compound in preparation for a prolonged death watch. Twilight cast the battered buildings in an orange glow as rain swept over the hilly city.

"Now for more than two years he has been a prisoner there, living like a prisoner," said Shaheen, a grayish stubble covering his hollow cheeks as he headed home with a crate of grapes. "This is humiliating for him."

Shaheen and several other Palestinians expressed worry that Arafat's fading health meant that the one figure capable of keeping peace among rival Palestinian factions would no longer be able to do so. "If he goes," Shaheen said, "there will be chaos. Everyone will want to take their share."

Carving lamb from a vertical spit at a sidewalk restaurant, Rami Dagharme said many people believed that the reports of Arafat's illness were being used to cover up a leadership struggle within the Palestinian Authority.

"I think it would be better if he were replaced by another person," said Dagharme, 27, from the northern West Bank town of Jenin. "He is tired, and he was not very successful. With all due respect, if he can't deliver he should step aside and let someone else do the job."

The shops along Rukab Street, named for the ice-cream parlor at one end, were shuttered at twilight. Graffiti comparing Israelis to Nazis and posters of various Palestinian political parties, among them Arafat's Fatah movement, covered the walls and metal doors in grim decoration. The sun set, the evening cooled, and the street slowly filled with people who had just broken their daily Ramadan fast.

At Rukab's, the young men serving ice cream said Arafat would remain a heroic figure, dead or alive. "Palestine is Arafat, Arafat is Palestine," one said, as if by rote. The others joined in.

"He's been with us a long time," said Jimmy, 25, who declined to give his last name. "He's committed his life to this cause and to us."

Palestinian women weep outside Yasser Arafat's Ramallah headquarters as his condition deteriorated.