JERUSALEM, July 14: Israel fears an outbreak of total anarchy and the collapse of the Palestinian Authority in the event of Yasser Arafat's death, according to an internal foreign ministry document leaked on Wednesday.

The document warned that hundreds of thousands of Palestinians were likely to march on Al Quds for the funeral of their veteran leader and stage mass demonstrations against the Israeli occupation of the territories, public radio reported.

The Palestinian Authority, which is headed by Mr Arafat, could completely collapse in such a scenario which would likely end in a situation of "total anarchy", the document added.

Mr Arafat, 75, has been effectively confined by the Israeli army to his West Bank headquarters in the city of Ramallah for the last two-and-a-half years. The aging leader has repeatedly vowed to die as a martyr for Al Quds and wants to be buried in the Al-Aqsa mosque compound in Al Quds's Old City, the third holiest site in Islam.

The Israeli document suggests however that Israel should not agree to Mr Arafat's wishes but he should instead be laid to rest in Abu Dis, on the outskirts of the holy city.

It outlines three scenarios for the Palestinian leader's death: "Arafat is killed during an Israeli army operation, Arafat dies a sudden death or Arafat dies after a long illness."

Regardless of the circumstances of Mr Arafat's death, Israel expects to be held responsible and proposes, in an attempt to discard this eventuality, to allow him to undergo treatment abroad should he suffer from ill health.

An adviser to Mr Arafat said the Israelis would be better off talking to the aging leader rather than speculating about his death. "Israel would be better off negotiating with the only man (Arafat) who is able to make peace when there is still time," he said.

Israeli Prime Minister Ariel Sharon sparked widespread condemnation after saying in April that he was no longer bound by a promise he had earlier made to the United States not to attack the long-time enemy. However, senior members of Sharon's government subsequently played down any prospect of an assassination operation. -AFP