RAMALLAH, West Bank ? If you want to understand how much has changed between Israel and the Palestinians, try driving around Ramallah’s deserted streets under curfew, dodging Israeli tanks.

Once a sleepy hill town that used to be home to many Palestinian-Americans, Ramallah became the temporary capital of the would-be Palestinian state after the 1993 Oslo accords. It was the seat of the Palestinian Authority, which ran West Bank and Gaza civil affairs. Six and seven-story Palestinian Authority ministries of white stone and glass sprouted along with gleaming new apartments buildings and villas, hotels, computer stores with names like Technology Plus and Expand Your Mind, and Internet cafes.

Today, the city is a ghost town. Piles of garbage rot in streets torn up by tank treads, shops are shuttered, parked cars have been crushed like tin cans by tanks, and ministry buildings are empty. But something else has happened that holds great danger not just for Palestinians, but for Israel. For all intents and purposes, the Palestinian Authority has been destroyed.

This goes beyond a military response to heinous acts of terror. It raises the question of who will rule the 3 million Palestinians in the West Bank and Gaza Strip. If the PA collapses, Israel will be left with three clear options: reoccupy the territories fully; negotiate an Israeli withdrawal from the West Bank and Gaza; or find some quislings to run Palestinian affairs in cooperation with Israel. Israeli Prime Minister Ariel Sharon’s apparent preference option three won’t work (see below).

The more likely scenario: Control in the West Bank will fall to armed militias that have no interest in peace negotiations. “We’ll probably see a total takeover by militias, which means there is no one (for the Israelis) to talk to,” says Khalil Shikaki, the West Bank’s most respected political analyst.

Their focus will be on fighting, terrorism will increase, and Israeli troops will make repeated incursions into Palestinian cities. The Palestinian population, bereft of an economy, services or political leaders or hope will produce a surfeit of terrorists who will infect the rest of the region. This seems to be the road down which Israel is headed.

Yasser Arafat is still confined in his compound, where the courtyard is eerily still now that Colin Powell and his entourage have departed. Every time my car turned down a street that overlooked the compound, I was waved back angrily by Israeli soldiers backed up by tanks.

The ministries of education, agriculture and industry have been ransacked, along with the Palestinian legislative council. School test records and land deeds have been destroyed, hard drives yanked from computers, videos of legislative sessions seized. Israeli military spokesmen say the documents are needed to assess what the authority was really doing.

But the message is clear: The entire Palestinian Authority is the enemy.

That goes for the Palestinian security services, too, which once worked in close cooperation with Israeli security services and the Central Intelligence Agency. Israel destroyed the headquarters of Jibril Rajoub, head of West Bank security, who is now labeled a traitor because he turned Hamas prisoners over to Israel. Why CIA Director George Tenet is scheduled to make a return trip to the region defies understanding. No remaining Palestinian security chief could afford to cooperate with him on fighting terrorism now.

Sharon seems determined to discredit all the Palestinian old guard who negotiated or are associated with the Oslo peace agreement. They have made terrible strategic mistakes, but many staked their lives on a two-state solution. After them, says Shikaki, comes a young guard of secular and Islamist militants who want only to fight.

Yet the Israeli leader appears certain he can find “moderates” who will cooperate with Israel. This reminds me of the Israeli creation of “village leagues” in the West Bank in the late 1970s, local thugs who were given guns and power to operate on behalf of Israel. They were despised by locals, and never acquired any legitimate power. Under current circumstances, Sharon is likely to fare no better.

That leaves Israel facing a Catch-22. Sharon can destroy the Palestinian Authority, but then burdens Israel with full occupation in all but name, and endless guerrilla war. The only exit is to negotiate a Palestinian state along modified 1967 borders.

Arafat & Co. have blood on their hands, but they are the only ones who can make the deal and only if the Bush White House leans hard on both sides to make it happen. But the White House is all talk and no action on the Middle East. Which means once shiny Ramallah is doomed to its current, bitter state.