LEAD: Here is an event that did not make the news from the Middle East last week. That is its significance.
Here is an event that did not make the news from the Middle East last week. That is its significance.
It happened in Ramallah, one of the principal towns of the Israeli-occupied West Bank. Several hundred Israeli soldiers cordoned off the streets in a prosperous residential section of town. They entered the home of a merchant, Ramzi Jaber: a large house with 10 rooms on two stories and one more room above.
The soldiers placed demolition charges that blew up the top room, leaving a hole in the roof and filling the stairway with rubble. Then they sealed off the second floor, blocking the windows with sheet metal and welding two veranda doors closed. The first floor, relatively undamaged, was left for Mr. Jaber and eight members of his family.
The army acted against Mr. Jaber's house because his 28-year-old son, Nader, was suspected of participating in the bombing of a bus in Jerusalem in 1983 - a bombing that took six lives. Two young men who were convicted of the bombing mentioned his name.
But Nader Jaber was never charged with that or any crime. He left to study in the United States in 1985, on an Israeli travel document that was renewed the following year. Where he is now is not known. There is no allegation that his father or other members of the family had anything to do with the Jerusalem bombing. There was no judicial proceeding to condemn the house. It was a collective punishment of the family, administratively imposed on the basis of suspicion against Nader.
If the army or the police blew up or sealed a house in the United States or any other Western country, without a semblance of due process, there would of course be an outcry. But Israel is a country with Western standards of justice. So we believe, and so Israel proudly maintains. How is it, then, that such a rank injustice - collective punishment without trial -can occur in Israel and not be news?
The answer - the depressing and important answer - is that 20 years of occupation have corrupted values. Legal processes that would have shocked people 20 years ago have ceased to attract attention. They are the norm.
Blowing up a man's house because his son was suspected of terrorism was big news when it first happened. But about 1,500 houses have been demolished or sealed since 1967, leaving 10,000 people homeless. It is not a big deal anymore, except to the victims.
The Likud Governments of the late 1970's and early 1980's used the practice more sparingly. It was intensified in 1985 by the Defense Minister in the present coalition Government, Yitzhak Rabin, as part of his ''iron fist'' policy on the West Bank.
''It is the routinization of insensitivity,'' an American observer in Israel remarked the other day. I had heard about the incident from a relative of Ramzi Jaber's in the United States and asked why it had got so little notice.
He added that the treatment of dwellings was only a small part of what had happened to standards of law during the occupation. There are now virtually no trials for terrorism in the West Bank, he noted. Suspects are held for days, then confess and are sentenced; or they are put in administrative detention.
What has happened to the law is only a small part of the corrupting effect of occupation. The larger part is simply the daily reality of ruling 1.3 million Palestinians without their consent.
And how is Israel to free itself of the corruption of occupation? There is talk again of negotiation, of a peace process. But to be serious, negotiation would have to involve Israel and the party that most Palestinians regard as their representative, the P.L.O. Merely to state that is to realize the political obstacles on both sides.
Alternatively, Israel could formally annex the occupied territories and give their inhabitants political rights. But that would utterly change the ethnic basis and politics of Israel.
Twenty years after the great military victory of 1967, it is a victory that menaces the victors. Arthur Hertzberg, writing recently in The New York Review of Books, noted Arab sins against peace but said they ''do not diminish Israel's burdens, for it needs peace more.''
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Mr. Hertzberg heard a prophetic warning from David Ben-Gurion in July 1967, a month after the war. Ben-Gurion said it was urgent to return the captured territories at once, for holding on to them would distort and might ultimately destroy Israel.
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