The rush-hour bus bombing killed at least 22 people and injured dozens more. It was only the latest atrocity by the Islamic Resistance Movement (Hamas), which had killed a kidnapped army corporal in a shoot-out with Israeli commandos the week before. A day after the bus explosion, Hamas released a videotape showing a man it said was the suicide bomber, a 27-year-old West Bank Palestinian named Saleh Abdel Rahim al-Souwi. Clutching a Kalashnikov rifle across his chest, Souwi declared: ““It is good to die as a martyr for Allah.''

Rushing home from London, Israeli Prime Minister Yitzhak Rabin announced: ““We cannot keep having this mixture of Arabs and Jews.’’ He sealed the borders with the West Bank and Gaza Strip, preventing 65,000 Palestinians from reaching their jobs in Israel. His government said 15,000 guest workers from developing countries would be invited to Israel to take over jobs held by Arabs, mostly in farm and construction work. Rabin also vowed to ““wage a battle to the bitter end’’ with Hamas and its allies. ““Israeli soldiers and security forces will get you sooner or later,’’ he warned them, ““and your fate will be a bitter one.''

Rabin’s own people were already suffering from emotional whiplash. Only two days after the killing of Cpl. Nachshon Waxman two weeks ago, Rabin flew to Jordan to put the final touches on a peace treaty that will be signed this week – the first between Israel and an Arab nation since Egypt’s Anwar Sadat broke the ice in 1979. Then, three days later, the bus blew up in Tel Aviv, driving some Israelis to tears and others to angry, Arab-baiting protests. Like riders on a runaway train, Israelis were frightened and confused, crying out for someone to make it stop. Nobody can. Neither Rabin nor his political opponents knew how to stop attacks by Islamic militants bent on preventing peace between Israel and the Arabs. And yet Rabin and Palestinian leader Yasir Arafat had set in motion a peace process that itself cannot easily be halted or reversed.

The process continues this week with Bill Clinton’s ambitious trip to the region, the most extensive by a U.S. president in 20 years. Clinton planned to play the proud godfather as Rabin and Jordan’s King Hussein sign the peace treaty. He was scheduled to address the Israeli and Jordanian parliaments, meet with Arafat and call on key U.S. allies in Egypt, Kuwait and Saudi Arabia. Aides expected him to visit some of the U.S. troops deployed in the Persian Gulf. And last week Clinton announced that he would add a stop in Damascus, hoping to coax Syrian President Hafez Assad toward a settlement with Israel.

Rabin’s immediate priority is to contain the terrorists of Hamas. But in the long run, he is worried about a much more terrifying force: fundamentalist Iran potentially armed with nuclear weapons and – if current Islamic revolutionary movements succeed – supported by like-minded allies surrounding the tiny Jewish state. The extremists are waging their campaign from the casbah of Algiers to the souks of Cairo, from the rich streets of Riyadh to the filthy refugee camps around Beirut. Support for the Palestinian cause is one of their rallying cries. In Rabin’s eyes, making peace with secular Palestinians and other pragmatic Arab neighbors is the surest way to set the Middle East – and Israel – on a safer course.

Nothing bothers Israelis more than a sense of helplessness in the face of mortal threats. Even though Iraqi Scuds directly killed only two people during the gulf war, the political decision not to retaliate was deeply disturbing to a nation that recalls Jews going ““like sheep to the slaughter’’ during the Holocaust. The fight against a largely hidden enemy like Hamas – one that strikes from within – is equally frustrating; it has no clear battle lines, no rules and no certain end.

Soon after the bombing, Rabin complained that he was hamstrung by Israeli law and needed more powers. But Israeli soldiers and police have the power to detain suspects for six months without showing cause, to blow up people’s houses and even to use ““moderate physical pressure’’ in interrogations. (The actual guidelines are contained in a secret set of regulations.)

What Israel really wanted was more cooperation from Arafat. Although Rabin did not blame the Palestinian leader for the latest attack, Arafat clearly was not going to wage war against Hamas, which has significant support in Palestinian-controlled Gaza. Last week Arafat released some of the Hamas activists he had arrested at the time of the Waxman kidnapping. From a security point of view, the release made no sense. ““We are just soldiers carrying out orders,’’ said Arafat’s frustrated police chief, Maj. Gen. Nasr Yousef.

Arafat and his aides fear that if they take on Hamas, they may lose popular support. Even before Israel closed the borders of Gaza, 45 to 50 percent of Gazans were unemployed, according to United Nations figures. ““If anything, the economic situation has gotten worse since the signing’’ of the Israeli-Palestinian peace pact a year ago, says Alex Pollock, a U.N. economist. The peace agreement with Israel has not won Gazans real freedom, but rather life in a political halfway house. ““You are talking to a ghost,’’ says Islamic activist Saud Shawa, displaying an Israeli travel document that describes his national identity as ““undefined.’’ ““I am a prisoner in the large jail called the Gaza Strip, and the keys are with Rabin,’’ he says.

Both Arafat and Rabin have little choice but to press forward toward a final settlement of the Israeli-Palestinian dispute. The question is: how fast? As it is, the time-table for Israeli withdrawal from Arab areas in the West Bank has disintegrated. Palestinian elections, accompanied by Israeli military redeployment, were supposed to happen in July. But negotiations on elections are still stalled.

So are the talks between Jerusalem and Damascus. Bill Clinton said last week that without an Israeli-Syrian settlement, ““we will never have comprehensive peace in the Middle East.’’ But in Damascus, the ruling- party newspaper said Syria could wait ““hundreds of years’’ to make peace with Israel. Assad has been deeply critical of concessions made to Israel by King Hussein, including an arrangement to lease back some farmland Israel is returning to Jordanian sovereignty. Assad insists he will settle for nothing less than full Israeli withdrawal from the strategic Golan Heights and says it’s ““blasphemy for any country to speak of leasing its land.''

Syrian forces, meanwhile, are occupying much of Lebanon. Islamic militants there late last week exchanged mortar, rocket and artillery fire with Israeli troops occupying a so-called ““security zone’’ in southern Lebanon. Israel and its Lebanese proxies shelled two villages, killing seven civilians. (In at least one case, Israel used antipersonnel tank shells that spray metal darts, drawing protests from U.N. observers.) The militants from Hizbullah, the Iranian-supported Party of God, responded by firing on Israel’s Galilee region, forcing its residents to take cover in bomb shelters.

Will it ever stop? Arafat’s Palestinian critics say Rabin won’t make the concessions necessary to ensure peace. Rabin’s Israeli political opponents argue that Arafat hasn’t given up his long-term aim of destroying Israel and that it’s no use reconciling with ruthless dictators like Assad, since nobody can predict who will follow them. Israeli hawks reject land-for-peace formulas, preferring instead to retain most occupied territory and to hold out for a better deal some time in the future. But virtually no Israeli wants to send the army to reoccupy the wretched warrens of Gaza. And despite the battering that Israeli society has taken in recent weeks, Rabin has a solid, if slim, parliamentary majority in favor of his peace strategy. Only defections by members of his own Labor Party or other more dovish parties can bring down his government. That should give him a year and a half, until new elections are required, to prove that he’s on the right track.

PHOTO: “A matyr for Allah’: The suspected suicide bomber

PHOTO: Disaster on Dizengoff Street: A blood-soaked survivor

PHOTO: Israelis suffered emotional whiplash: A victim’s funeral

PHOTO: Blasted shell: Rescuers face the grisly task of sifting through the bodies and bloodied rubble of the Tel Aviv bus

PHOTO: A second Arab nation makes peace: King Hussein embraces Israel’s Shimon Peres in Amman