As if in preparation for President Clinton's imminent visit to Israel and the occupied territories, Yasser Arafat announced recently that 1999 "will be the year of the independent Palestinian state." Many believe such a "unilateral declaration of statehood" on or before May 4 (the end of the "transition period" provided by the Oslo Accords) would be a major boost for the Palestinians, allowing them to seize unilaterally what negotiations have failed to bring them to date.

The Clinton administration is particularly worried about a statehood declaration, but its anxiety sends exactly the wrong signal, emboldening Palestinians who favor it. There is no reason why a unilateral Palestinian assertion of statehood now should have any greater weight than the last time it was tried, exactly 10 years ago, a play that many people seem to have forgotten. Washington's unyielding reaction to it then consigned it to the dust bin, and a similar approach now by the administration would do the same.

In November 1988, Mr. Arafat announced the creation of the Palestinian state, which was quickly "recognized" by more than 90 countries. At the United Nations, the sign that said "Palestinian Liberation Organization" was removed from in front of their delegation, replaced with "Palestine." Since "Palestine" sounds more like a place than "PLO," it also sounds more like a state than a mere observer organization (which the PLO was and still is), which in turn signified, in the minds of many, real progress. Only at the United Nations could such logic be taken seriously.

One place it was not taken seriously, at least not by everyone, was Washington, where Secretary of State George P. Shultz responded immediately that "unilateral declarations have no weight." Hoping for better news from the Bush administration, one of the PLO's first moves in 1989 was to campaign for membership in a wide range of U.N. specialized agencies, such as the World Health Organization. All these agencies had charters specifying that only "states" could be full members, so obtaining membership for the PLO would be yet another international validation of its new, higher status. Many Europeans wanted to defer to this PLO exercise in creative legal reasoning, arguing that Palestinian statehood was inevitable and that we ought not stand in the way.

Secretary of State James A. Baker III disagreed. He expressed his intense displeasure at the PLO's ploy by threatening publicly to withhold all American funding, assessed or voluntary, from any U.N. agency whose membership enhanced the PLO's status by admitting it as a member. Although Mr. Baker's riposte displeased those who believe the U.N. has an unconditional right to unending funding from the United States, it had the desired effect. After a few lingering gasps, the PLO's effort to create "facts on the ground" through the United Nations collapsed.

So what is different today? Why should "Declaration of Statehood - The Sequel" cause any greater effect than the original effort? The answer is that, as before, there will be no impact if Washington remains firm in not allowing diplomatic posturing to substitute for reality. Although many fear that the Europeans are once again ready, as they were in 1989, to swoon, their reaction will be as insignificant as the Palestinian maneuver itself if the Clinton administration can keep its composure. In real-world terms, declaring a "state" where none exists is simply an unhelpful distraction, and a retreat by Palestinians to the comfortable Third World thinking of U.N. circles in decades past.

Ten years after the first announcement of statehood, it is true that the Palestinian Authority is at least present on some of the territory it claims as part of its putative state. But by any realistic analysis of the requirements for statehood, they are still woefully short. The Authority does not truly function independently (and will not function more so by uttering a few words); it governs no coherently defined territory; it does not fully carry out the domestic and international functions of government; and it is manifestly not fully capable of carrying out commitments it makes on behalf of the people it supposedly governs. The PA may be closer to statehood than the PLO was 10 years ago, but it is not there yet. Overactive imagining will not take it any nearer.

The Clinton administration has said repeatedly that it opposes unilateral statements or actions touching on "final status" issues, and the president should publicly reiterate that position now. A clear repudiation now would help focus both parties on concrete issues rather than diplomatic abstractions, and make real progress more possible. This is how decisive American leadership actually works, and now is the time to assert it.

John R. Bolton is the senior vice president of the American Enterprise Institute. During the Bush administration, he served as the assistant secretary of state for international organization affairs.