The idea behind an interim state is to generate hope among the Palestinians and to undermine the belief among them that violence against Israel is the only means to move to eventual creation of a larger, permanent state, administration officials say. Creating the formal mechanisms of an interim state--including a constitution, national assembly and judiciary--also could weaken the decisive role Palestinian Authority President Yasser Arafat has played and disperse power among others, the officials say. That is a major goal for both Bush and Israeli Prime Minister Ariel Sharon.

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"No right-minded Israeli official is going to agree to give more political power to the Palestinian Authority ... when that body is as it is today. It sponsors terrorism, is untrustworthy, and it doesn't live up its commitments," an Israeli diplomat said. "No one will agree to an interim or provisional state that is a mirror of what it is today."

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Powell publicly broached the idea of an interim state in an interview this week with the Arab world's leading newspaper, Al Hayat, which is based in London. He used the term "provisional" to describe it, but the administration has opted for an interim state to make clear that such an entity would be considered a "way station" en route to a permanent state and final resolution of the half-century-old conflict, said the well-placed administration source.

A provisional state sounds too open-ended, said the source, adding: "Interim captures the flavor we're looking for."