The most damaging outcome of the current phase of Israeli-Palestinian violence is the near-total collapse of the Palestinian Authority. While all eyes are riveted on Israeli incursions and the continuous barrage of Kassams, on attempts to release Gilad Shalit and on the progressively dire results of collective punishment, almost no attention is being paid to the dangers inherent in the growing political chaos. Unless a conscious effort is made by Israeli, Palestinian and international leaders to restore some semblance of the rule of law, the consequences for the region will be truly unspeakable. The latest escalation in the Palestinian-Israeli conflict threatens to intensify the already advanced breakdown of central authority in Gaza and large portions of the West Bank. Contrary to what many believe, the operation in Kerem Shalom was not aimed only at the State of Israel. It had two other targets: Ismail Haniyeh and Mahmoud Abbas (Abu Mazen). Those responsible have made it clear that they are as interested in undercutting the existing Palestinian leadership as they are in embarrassing Israel. Ironically, Israel's response to the crisis has served to exacerbate the lawlessness - thus playing directly into the hands of its perpetrators. Officially, the current military initiative has a twofold purpose: the return of the abducted soldier and the termination of rocket attacks on the Negev. But the roundup of Palestinian parliamentarians and the detention of over half the cabinet are indicative of a campaign to hasten the collapse of the Hamas government. Little, if any, thought has been given to what will come in its stead. In the rush to topple a regime antagonistic to Israel's very existence, insufficient attention has been paid to the even more terrifying implications of the breakdown of political order. Indeed, the experience of the past few decades proves that maybe the gravest threat to human security and global order emanates from state collapse. THE EXAMPLES of the Democratic Republic of the Congo, Liberia, Sierra Leone and Somalia highlight the comprehensive tragedy of failed states. Millions have lost their lives because government institutions have ceased to function. The same has been true in Kosovo, Afghanistan, Chechnya and, closer to home, in Lebanon and Iraq. In these and other cases, the frailty of official institutions, exemplified by the inability to exercise a monopoly over the use of force, has led to the rise of armed militias whose actions along extremely porous boundaries have wrought untold devastation. The absence of governance and the dissipation of binding norms is the political equivalent of a series of massive natural disasters. The fragility of the state apparatus is not just an esoteric preoccupation of political scientists. It has immediate and deleterious ramifications for residents of these dysfunctional entities, their neighbors, and the international order. The prospect of the complete collapse of the Palestinian Authority, therefore, should be greeted by anything but equanimity. For Palestinians the glorification of armed commandos independent of the official leadership is an invitation not only for continued Israeli military pressure but also for ongoing domestic threats to personal security. Egypt, Jordan, Lebanon and even Syria are becoming increasingly aware of the price of the pervasive anarchy in the region - hence their active quest for a compromise that can avert further deterioration. Israel, too, must weigh any ephemeral immediate gains against the effects of the chaos attendant upon the disintegration of the Palestinian Authority. Such an eventuality will undoubtedly strengthen the Khaled Mashaal-Hizbullah-Iran axis at the expense not only of the PLO, but also of the political wing of Hamas represented by Haniyeh. More tellingly, the lack of governance in Gaza and the West Bank might increase Israel's responsibility in these territories - a burden even the opposition on the Right is reluctant to assume. The task of rehabilitating shattered central institutions is far more daunting than preventing their collapse. For this - if for no other - reason, it is imperative that immediate measures be taken to avert utter chaos. The first step in this direction requires putting an end to the present crisis. This means that Israel should accede to the Egyptian-brokered proposal for the release of prisoners in exchange for the return of Gilad Shalit and a full cease-fire. Although such a move may in the short term strengthen the standing of Hamas (already bolstered by Israel's massive assault in Gaza), if properly handled it can be parlayed into a reversal of the present downward spiral. An allied measure, then, should involve implementation of the Prisoners' Letter, already initialed by the parties. This agreement is critical to the formation of a broadly acceptable Palestinian government that may be able to restore law and order locally while separating Palestinians in Gaza and the West Bank more emphatically from the militant Hamas outside. I t is also essential to the revival of a diplomatic momentum which would enable a transition to Phase II of the road map and, with it, to the creation of a Palestinian state with provisional boundaries leading to negotiations on a permanent settlement. Political anarchy has a way of contaminating everything in its reach. The No. 1 priority of all concerned, regardless of ideological persuasion, should be the avoidance of such a calamity.