Israel reportedly has initiated a contingency plan anticipating the collapse of Mr Arafat’s Palestinian Authority and a challenge for power by fundamentalist groups, including Hamas and Islamic Jihad, according to a Reuters report.
The plan predicts a collective expression of grief by Palestinians around the world.
The plan also reportedly states Israel expects to be blamed in the event of Mr Arafat’s death, and that the leader’s rule will be remembered as heroic and sacrificial.
Britain’s Guardian newspaper also reports that outbreaks of violence beyond the Gaza strip are likely.
“The danger of factional fighting and warlordism in the disconnected territories of the West Bank, Gaza and the refugee camps of Lebanon and the wider diaspora will be very real,” said the editorial.
But it is a prediction that has not yet materialised, as so far the streets of the West Bank and Gaza Strip have been quiet, according to Reuters, which claims it is a possibly a “sign to some observers that Palestinians want to project an image of stability to the outside world”.
Israeli-based newspaper The Haaretz has made a plea to locals not to let the situation unravel, urging self-restraint in the territories.
“Clearly, Israel must do everything to restrain military activity,” it said.
“It must not initiate military operations and must withhold planned operations,” said the newspaper, warning the alternative will be “immediate chaos” and the presence of an international force.
The Haaretz editorial also predicted a power struggle over inheritance will take place within Hamas.
“It could be quiet or erupt in violence,” reported the Haaretz.
There is no doubt stability in the region will depend on the Palestinian people finding a leader with whom Israel, Europe and the US will be able to negotiate with.
But Palestinian officials have insisted there is no power vacuum.
“The Israelis want to provoke a power struggle,” Abbas Zaki, a member of Fatah, told the Arab News.
“But we are determined to remain united at this critical moment,” Mr Zaki said in the interview.
The leaders of the major Palestinian organisations met at the weekend to agree on a transfer of powers.
Palestinian Prime Minister, Ahmed Qorei has taken over as acting head of the Palestinian Authority, while former premier Mahmud Abbas is temporarily heading the PLO and Arafat’s dominant Fatah faction.
At the same time, Israeli Prime Minister Ariel Sharon has vowed to stop his arch-foe from being buried in Jerusalem.
“As long as I am in power, and I have no intention of leaving, he (Arafat) will not be buried in Jerusalem,” public radio quoted Mr Sharon as telling a weekly cabinet meeting last Sunday.
A team headed by Mr Sharon’s private secretary, Israel Maimon, has prepared a report to explain why such a burial would be unacceptable to Israelis, said the radio report.
And Israeli television has quoted political officials saying Israel would only sanction his burial in the Gaza Strip.
The Muslim religion calls for burial within 24 hours, and a crisis could develop if Palestinians demand that the burial in the al-Aqsa Mosque in Jerusalem.
A burial at the religious site is considered a supreme honour for a Muslim.