During most of last Thursday Yasir Arafat wouldn't hear of leaving his West Bank headquarters for medical treatment abroad. Though he'd lost consciousness the day before and couldn't stomach even the plain broth served up by his personal cook, the 75-year-old Palestinian leader told aides he wanted to remain in the Muqataa, as his crumbling Ramallah compound is known. For one thing, Arafat felt no worse than he did a year ago during a rough bout with influenza, according to high-placed Palestinian officials. And since Israel was unwilling to guarantee his return, he wouldn't risk having to live out his days in exile.

The turning point came in the afternoon, when Egyptian doctors joined a medical team that already included Jordanians, Tunisians and Palestinians. A blood test turned up an unusually low platelet count and some of the doctors were worried that Arafat, long the symbol of the Palestinian struggle for independence, had leukemia. "They confronted him with the news and told him he should fly out immediately," said Ghassan Khatib, a member of Arafat's cabinet who spent much of the day in the compound. By then, Israeli Prime Minister Ariel Sharon had succumbed to pressure from the U.S. Embassy and promised to leave the door open for Arafat's return. All that was left for the Palestinian leader was to choose a destination.

Arafat, one of the world's longest-serving leaders, has begun what by some estimates is the final phase of his life in a military hospital outside Paris. Though his gift for rising from defeat is the stuff of legend (and cliche) in the Middle East--he has survived assassination attempts and a desert plane crash--doctors were expected to issue a diagnosis that would keep the Palestinian leader bedridden for months or longer. For Arafat, who has run the Palestinian movement for the past 36 years, that probably means he won't live to realize his dream of an independent state. For the Middle East, it might remove an obstacle to peace or it could foreshadow even deeper chaos. "We could see anything from a coup attempt by [the Islamic group] Hamas to an orderly transition of power to Arafat's deputies," said Yossi Alpher, an Israeli political analyst.

Though Arafat leaves behind a cadre of capable deputies, he never designated an heir. Palestine Liberation Organization old-timers Mahmoud Abbas and Ahmed Qurei are the most likely candidates. But neither is popular among Palestinians and neither has loyalists among the many security branches in the West Bank and Gaza. "I'm afraid we'll start seeing clashes between security forces" vying for control, says Abdel Jawad Saleh, a member of the Palestinian Legislative Council and a frequent Arafat critic. He said it was no accident Arafat left behind a power vacuum. "The problem is that Arafat undermined all [governing] institutions. He believed he was everything."

Then there's the problem of Hamas. The militant group bent on establishing an Islamic state in Israel's place has grown more popular during four years of fighting between Israelis and Palestinians, in part by highlighting corruption in Arafat's administration. Hamas has no official representatives either in the cabinet or in Parliament. Some analysts worry the Islamists would try to seize power in Gaza, where the group is especially strong.

Israel has its own goals. Sharon has rejected negotiations with Arafat for years. With backing from the Bush administration, he's opted instead for "unilateral disengagement," a plan to withdraw from Gaza while tightening Israel's grip on parts of the West Bank. Despite resistance from hard-liners in his own Likud party, Sharon won parliamentary support for the plan last week. Arafat's departure, however, could increase pressure on Sharon to renew negotiations over a Palestinian state. "Arafat has served as Sharon's alibi," says Yossi Beilin, a dovish Israeli politician and a former peace negotiator. He said Sharon was "probably now praying for Arafat's health."

As of the weekend, Arafat's illness was still a mystery. French doctors seemed to rule out leukemia; other sources suggested he might have colon cancer. But what if Arafat recovers? In that case, at least one potential dispute will be averted. Arafat has told aides he wants to be buried on Haram a-Sharif, the contested compound in Jerusalem's Old City that houses two large mosques and is Islam's third holiest shrine. But the sacred place is known to Jews as the Temple Mount, and was the site of their ancient Jewish Temple. "There's no chance we would let him be buried there," says Zalman Shoval, a senior Sharon adviser. Instead, Israel has designated a plot in Abu Dis near Jerusalem, beyond a 24-foot separation wall Israel is erecting. "We have to take into account that his grave could become an attraction for hundreds of visitors every day," a senior Israeli security official told NEWSWEEK. "And we wouldn't want them to be traipsing through our country." With all the problems Arafat's departure poses for Israelis and Palestinians, that might be the least of their concerns.

With Joanna Chen in Jerusalem, Samir Zedan in Ramallah and Eric Pape and Tracy McNicoll in Paris