ASHINGTON — In his recent speech on the Mideast, President Bush made any improvement in Palestinians' miserable life conditional not only on security for Israel but on the removal of Yasir Arafat, their elected president, and on the implementation of political reforms. Since most Palestinians have no confidence in the Bush administration, they took the president's remarks as a green light to Israel to remove Mr. Arafat and perhaps renew occupation. Israel's declaration of "victory" after the speech indicated that Israelis interpreted it similarly.

If you were a Palestinian, you would probably feel that you have nothing more to lose. If you were Mr. Arafat, you would certainly have no incentive to step down. After all, he would be doing nothing more than leaving his people with a despicably corrupt and rightly friendless Palestinian Authority, keeping for himself only a political farewell colored by shameful defeat. He might also be leaving his people to the mercies of a politically strengthened fundamentalism.

These do not have to be our alternatives. Mr. Arafat does need to give up some power, and a great many Palestinians want him to. But neither he nor they will yield to curt demands from Washington or anywhere else. Surely that has been made clear in the past few years.

The framework for transformation already exists. The Palestinian Authority was always meant to be a temporary framework pending the creation of a full state structure and agreement with Israel on permanent status. The reforms publicized last month — centralizing finances and security, calling for municipal as well as national elections — were the result of long and careful work by Palestinians hoping to put their state on a firm foundation.

The question of what kind of democratic governance will prevail in the future state of Palestine has been a matter of heated political debate. A draft constitution, finished two years ago, called for a presidential system. But many Palestinian scholars believe the only way to overcome the authoritarian legacy of the Palestine Liberation Organization is through a parliamentary system with a strong prime minister.

A parliamentary system would have two great advantages for Palestine: it would provide a peaceful forum for many different parties and factions to struggle over power, and it would severely restrict the ability of any one person to dominate the political scene for very long. The parties and factions that characterize Palestinian politics today — Hamas, Fatah, Islamic Jihad, Palestinian People's Party, Popular Front for the Liberation of Palestine and others — would need to form coalitions to contest power, and this would lead to a general moderation. It is unlikely that any party could so dominate the scene that it could name the prime minister without extensive consultation with allies.

The Palestinian Legislative Council is currently debating three amendments to the existing Basic Law, all introduced by Mr. Arafat and all minor changes. It should debate and adopt a fourth amendment as well, to transform the system from presidential to parliamentary. In such a system, the parliament could elect the president and, in the course of drafting the constitution, could limit his powers. The essential executive power would rest with the prime minister. Obviously, adopting this parliamentary system would eliminate the need for presidential elections, now scheduled for January 2003.

I believe Mr. Arafat would not contest parliamentary elections with the hope of being named prime minister. I expect he would wait to be elected president, perhaps president for life in recognition of his crucial contribution to Palestinian independence. But even if he did campaign for the premiership and win, he would at last be in a system that would force him to share power and recognize the legitimacy of domestic opposition.

Many Palestinians support the adoption of a prime-ministerial system. Forty-eight percent approved such a change in a poll I conducted this May. Forty-four percent opposed it. I believe support is in fact much stronger, but was tamped down because respondents did not want to be seen as advocating Mr. Arafat's withdrawal from prominence — that is, they hesitated at endorsing the wishes of Israel and the United States.

This spring, during the surge in debate over political reform that followed Israel's incursions into the West Bank, the Revolutionary Council of Fatah, Mr. Arafat's party, and the Palestinian Legislative Council both urged that Mr. Arafat appoint a prime minister, as he could do under the Basic Law. Palestinians understand parliamentary systems, with their multiple parties and coalition governments; this is the system Israel has, and Palestinians, of course, have observed it closely. In polls, Palestinians give Israel's democracy the highest positive rating, ahead of any other system.

Placing power in the hands of a parliament, rather than a president, would speed the transformation of militias and political factions like Hamas into parties that compete for votes. It would also put an end to the P.L.O.'s legacy of one-man rule. Palestinians could at last escape the trap of supporting a bad government out of fear that any replacement would be worse. Importantly, young nationalists, angry with the corruption and mismanagement of the old guard, would find in the new system a place for themselves.

The reasons for public support for a parliamentary system are obvious. Over time many Palestinians have lost confidence in Mr. Arafat, with his approval rating plummeting from a high of 75 percent in January 1996 to 35 percent this May. He has failed to deliver good governance or an end to occupation. During the current confrontations with Israel, most believed that he failed in projecting leadership. Now young men protest his rule in the streets of Gaza.

Yet most Palestinians also fear that American demands for new leadership are meant to clear the way toward a long-term interim agreement with a Palestinian ministate — the exceedingly vague "provisional" state alluded to by Mr. Bush — that will amount to an Israeli protectorate in a small part of the occupied territories. In the fight to avert being left with such a defenseless and dependent statelet, Palestinians believe strongly that they still need Mr. Arafat. He is their elected leader and the symbol of their national aspirations, and without him they would fear both Israeli and international neglect, as well as political strife at home.

The United States can help address these fears by maintaining its support for Palestinian statehood and political reform and insisting that all parties work toward a sensible permanent-status agreement. Without such assurances, elections — particularly if they are under the current presidential system — may result in strengthening Islamists and radical nationalists. But if Mr. Arafat, with American support, were to lead Palestinians up to parliamentary elections, the outcome could be different.

Khalil Shikaki is director of the Palestinian Center for Policy and Survey Research in Ramallah and currently a visiting fellow at The Brookings Institution's Saban Center in Washington D.C.