David Satterfield, the low-level U.S. envoy sent to Jerusalem about two months ago, took some time off to attend a strategic briefing by Major General Giora Eiland and senior IDF General Staff officers in Tel Aviv. One of the options for resolving the crisis in the territories suggested by the officers was the "constructive destruction" option: laying waste to the Palestinian Authority, reinstating full Israeli control of the kind that existed before the first intifada, and reaching an imposed settlement with obedient canton administrators. Although the generals quickly wiped the constructive destruction option from their slate, echoes of it reached Jerusalem and Washington.

No formal decision was ever reached by the political echelons to adopt this idea. And yet the outcome - the chaos in the territories - has increased the Palestinian leadership's suspicions that Prime Minister Ariel Sharon has made up his mind to finish it off. Senior officials in Israel's defense establishment and Foreign Ministry also believe that this deranged idea was not born in the feverish brain of some wild-eyed officer. They find it hard to believe that the prime minister does not understand what the combination of stepping-up pressure on the Palestinian population and halting diplomatic pressure on Israel is liable to breed.

Stage one - destroying the Palestinian Authority - is already progressing at a satisfactory pace. The case of the little village of Yanoun, whose residents, fed up with being bullied by the hoodlums known as "settlers," packed up and left, is the first hint of a process of "willing transfer." Israeli defense officials and foreign diplomats who have been working in the territories for years are noticing an increase in emigration from the territories. Most of the emigrants are city dwellers (the Christian population is gradually disappearing), members of the middle and upper class, businessmen and intellectuals. In other words, the elite that until two years ago turned the wheels of the newborn Palestinian economy.

Those who are loyal to the heritage of Gandhi (the late leader of Moledet, Rehavam Ze'evi) are delighted by this phenomenon, and there are no signs that the residents of Sycamore Ranch (the home of Sharon) are losing any sleep over it. Don't they know what happens to societies that wipe out their productive middle class? Don't they understand that a paralyzed economy pays no taxes, and that when domestic income is non-existent and dwindling revenues from customs duties is withheld by Israel, the police sit home and the robbers make merry? Are they knowingly taking the risk of anarchy in the territories? Can't they see that Koran-spouting militants and Torah-spouting bullies will turn the territories into a cross between Algeria and the Balkans? Maybe for them, these are only labor pains - a prerequisite for the last stage in the destruction and rebirth of the Greater Land of Israel.

But then again, maybe the whole thing is an illusion. Maybe it's not just wishful thinking when Foreign Minister Shimon Peres says that Sharon's painful concessions include the establishment of a Palestinian state with temporary borders (Sharon presumably knows that the IDF cannot come and go freely in an independent Ramallah or drop bombs on a sovereign Gaza). The important question - maybe even the critical one - is whether the Palestinians believe that Israel has any interest in a compromise that is acceptable to them. From conversations with Palestinian leaders who are considered pragmatic and level-headed, it appears that this possibility is slowly vanishing from their consciousness, to use IDF chief of staff Moshe Ya'alon's favorite word.

The hope that lessons learned from the violence and brutal anti-terror measures will reopen the political channel is being replaced by the idea that perpetuating the deadlock is not necessarily the worst option. One person who is having such thoughts is Palestinian Labor Minister Ghassan al-Khatib.

This week, on the Israeli-Palestinian Web site Bitterlemon, he wrote that the Palestinians fear that Sharon, "known for his criminal record," will take advantage of the dramatic events surrounding the upcoming war against Iraq to step up the killing of Palestinians and introduce other punitive measures. Al-Khatib expressed concern over "indirect transfer" that could result from scare tactics such as those used by the Jewish underground in 1948.

Another Palestinian minister told an Israeli friend this week that an increasing number of Palestinians are convinced that the only choice Sharon has left them is between another naqba (catastrophe) and a return to the days of enlightened occupation. He says the Palestinians will fight to the last bullet. That is the real road map.