As it has become more acceptable to speak critically about Israel during the last two years, critics have worked hard to draw important distinctions. Those who condemn current policies of the Israeli government underscore that, in doing so, they are not denying Israel's right to exist. Similarly, critics of the Israeli role in the occupied territories are careful to distinguish between governance in the territories and policy within Israel proper.

It has long been clear to honest observers that the Israeli administration of the occupied West Bank and Gaza Strip--where the Palestinian uprising has been raging for almost two years--is a far cry from democracy. A series of military orders regulate the territories, and the neglect of the Palestinian population and the abuse of military power both before and after the intifada's beginning have been well documented.

The relative stability of the situation within Israel proper has up to now provided a measure of relief for those who are troubled by the intifada and Israel's response to it. It seems that the government has not allowed its abuses in the turbulent territories to spill over into the rest of Israel. Israeli law applies as it always has within the state itself, and it is possible to see Israel--as it is frequently described--as a "western-style democracy."

A bill currently before the Israeli Knesset, however, threatens to shatter such illusions of an Israel with a democratic core. The "Third Amendment to the Prevention of Terrorism Ordinance of 1948" was passed by the Knesset on its first reading in May, and is expected to pass again at its second and final reading sometime this month.

The proposal would extend Israel's blatant disregard for the Palestinian residents of the West Bank and Gaza Strip to those Arabs who live within Israel itself as Israeli citizens.

ARABS comprise 18 percent of the population of Israel proper. Israeli budget allocations, however, have never fully acknowledged their existence. As the Jerusalem Post reports, more than half of Arab families in Israel live below the poverty line. Even so, the Israeli government regularly provides Arab towns and villages with as little as one-third of the regular budget allocations and one-tenth of the development funding provided for equivalent Jewish municipalities.

As a result, a host of non-profit, voluntary Arab organizations have been formed in recent years to provide such diverse social services as public libraries, scholarships for students, health care, assistance to the aged, day-care centers, and sports groups.

Because, as Palestinian lawyer Hussein abu Hussein says, "We don't receive one agora from the state," these organizations are forced to rely primarily on funding from philanthropic and charitable groups abroad. Between 80 and 100 such Arab voluntary organizations receive 90 per cent of their funding from abroad, mainly from Western Europe and North America.

The proposed "Third Amendment" threatens the very existence of these organizations. If passed, the bill would vest in police officers the power to "seize the property" of any organization that has ever "directly or indirectly" received funding from "a terrorist organization, or a corporation which is designed to act, or acts, for the denial of the existence of the state of Israel."

The tortuous nature of that language was hardly unplanned. It is not difficult to imagine the misguided logic by which charitable organizations that fund Arab groups will be defined as acting "for the denial of the existence of the state of Israel."

CONFISCATING the property of these non-profit Arab organizations is tantamount to driving them out of existence. According to human rights lawyer Avgidor Feldman, the proposed legislation "can clearly be used to suppress legitimate activities."

Besides being a practical matter of the utmost concern for Israel's Arab community, this bill would clearly represent a fundamental violation of civil rights. All that is required for the seizure of property is "reasonable suspicion"--not even a search warrant.

When such broad discretionary power is granted, arbitrary police actions are the inevitable result. So far, in those instances where Israeli police officers in the occupied territories have been invested with powers of arrest on such vague grounds, charges have been eventually brought against only 3 percent of those arrested.

As Knesset member Amnon Rubinstein has acknowledged, "In a democratic system you do not harm and you do not punish unless you first forewarn citizens. This amendment breaches this important rule."

WHEN Divinity School Dean Ronald Thiemann last week cancelled a planned forum comparing Israel and South Africa, the debate over the propriety of that comparison was rekindled on campus.