WASHINGTON - Five months after President Bush called for new Palestinian leadership untainted by terror - a clear signal that perennial survivor Yasser Arafat had to go - U.S. officials are now playing down that demand in a bid to revive the Israeli-Palestinian peace process.

American officials insist that their determination to see Arafat stripped of power has never flagged and say that they recognize the peace process is likely to go nowhere while he controls the Palestinian Authority.

But they say that making him a target could merely boost his popularity and prevent the emergence of the kind of reform-minded leaders that both Americans and Israelis are demanding - leaders who could quell violence against Israelis and become credible negotiating partners for Israel.

"When you target Arafat, you reinforce him," a State Department official said. "He's been synonymous with the Palestinian cause for 30 years. By making him the center of debate, you render impotent the people who could work for a new dynamic" among Palestinians.

The shift in approach has stirred alarm among key supporters of Israel that the United States is backing away from the president's demand so as to appease Arab and European allies, who have joined the Americans in an effort to quell Israeli-Palestinian bloodshed and launch a renewed peace process.

They have sought, and say they received, top-level assurances from the White House that Bush remains determined to carry out the intent of his June 24 speech, in which he set a new Middle East policy.

Besides demanding new, democratically chosen Palestinian leaders and a halt to terror, he set a target of 2005 for ending the Israeli occupation of Palestinian territory and creating an independent Palestinian state.

Draft policy leaked

The current controversy was triggered by the leak of a draft of a key peace-process document being developed by diplomats from the United States, the European Union, Russia and the United Nations.

The so-called "roadmap" for ending the Israeli-Palestinian conflict, dated Nov. 14, is to spell out a sequence of steps that would be required of both the Palestinians and Israel to halt terror and violence, reform the Palestinian government, end the Israeli siege of Palestinian communities, freeze Israeli settlements in the West Bank and Gaza, and launch negotiations.

The document avoids any clear demand for new Palestinian leaders and only indirectly specifies the kind of new government envisioned. It calls for a new Palestinian constitution "based on strong parliamentary democracy" and a Cabinet with an "empowered" prime minister, but is silent on the position of president, which Arafat holds.

The document also calls for Palestinian elections "as early as possible," but doesn't specify whether they should be just for a parliament or for president as well. Nabil Shaath, a top Arafat envoy, said during a recent visit to Washington that he expected Arafat's name to be on the ballot. He also said it was likely that the new constitution would model the presidency on France's, which would give Arafat considerable power.

The American-Israel Public Affairs Committee, the main pro-Israel lobbying organization in Washington, complained in a new publication that "the roadmap completely overlooks Arafat's well-documented and active role in terror and the need to have him replaced. It ignores the need for 'new and different Palestinian leadership' that the president laid out as a requirement for statehood, suggesting that continued Palestinian Authority ties to terrorism would not necessarily prevent the United States from endorsing a Palestinian state."

The draft document now being circulated requires Palestinians to reiterate Israel's right to exist and to call for a total cease-fire, end incitement to violence and resume security cooperation with Israelis. But it fails to demand specific results in terms of anti-Israel violence.

At the same time, the document requires that the Israeli government sharply scale back its current military operations. It says Israel should take no actions "undermining trust, including deportations, attacks on civilians or in densely populated civilian areas," land confiscation, demolition of Palestinian homes and destruction of Palestinian institutional facilities and infrastructure. It also requires Israeli official institutions to "end incitement against Palestinians."

Near East Report, the AIPAC publication, said, "The amount of action [required to be] taken by the Palestinian Authority to end and prevent terrorism is significantly reduced in the roadmap" from previous administration policy.

'Some concerns'

"We have some concerns that the Nov. 14 draft roadmap contradicts some of the core principles laid out by the president," said Josh Block, an AIPAC spokesman. "We are confident, however, that the administration is committed to the president's June 24 vision."

U.S. officials don't deny the authenticity of the leaked "roadmap," but they insist it is a work in progress and has undergone further changes since the Nov. 14 draft.

Edward Abington, a Washington lobbyist for the Palestinian Authority, said, "What is asked of Israel is relatively minor compared with what's demanded of the Palestinians," which includes "a fundamental transformation of the Palestinian political system."

The roadmap's demands for reform, he said, are "all indirect criticisms of Arafat's leadership and the style of his leadership. Anyone who reads this knows exactly what this means."

The dispute reflects several months of behind-the-scenes skirmishing in Washington that have been overshadowed by the U.S. confrontation with Iraq.

While many Washington hard-liners, along with some prominent Israelis, favored putting off any serious effort to end the Israeli-Palestinian conflict until after Iraqi leader Saddam Hussein is ousted, Secretary of State Colin L. Powell has kept Mideast peace as a priority.

He was responding in part to a clamor from U.N. officials, many Europeans and moderate Arab leaders, who see the continuing Israeli-Palestinian bloodshed as a greater source of instability in the Middle East than Hussein.

A renewed peace process, they hope, could help insulate moderate Arab leaders, such as Jordan's King Abdullah, from the popular anger likely to erupt if the United States goes to war against Iraq.

Pressure stepped up

While pressing forward with the roadmap, the administration has stepped up pressure on both the Arafat regime and the Israeli government of Prime Minister Ariel Sharon. In a report to Congress, the State Department issued a lengthy indictment of the Palestinian Authority's failure to prevent - and actual encouragement of - attacks against Israelis.

Soon afterward, the American ambassador to Israel, Daniel Kurtzer, took aim at continued Israeli settlement expansion in the West Bank and Gaza, which Sharon has championed, saying settlers "do not represent a national consensus" in Israel.

"The settlements movement today is not about the future existence of the state. It is about the particular interests of settlers and their supporters," Kurtzer said.

Continuing "roadmap diplomacy," however, will probably be stalled for several weeks. A White House official said the document is unlikely to be formally unveiled until after the Israeli election in late January.