OK, the only place I would tend to disagree with you (because your legal arguments are extremely sound) is the fact that Israel appears to have agreed to the legitimacy of the Palestinian Authority as a governmental body and has only now rejected its legitimacy on the grounds that Arafat hasn't "done enough" to combat terrorism against Israel.Forget about terrorism against Israel; liquidating the PA on grounds of that "government's" state terrorism against it's "own" people in the West Bank would be justification enough.
"Well, we're trying to grant the Palestinians some autonomy; BUT, your government has proven to be an oppressive, nepotistic kleptocracy; SO, Mr. Arafat, it's time for you to take the eternal celestial dirt-nap, and we'll see if maybe Bassam Eid (feel free to run a google search on this name) or some other Palestinian can come up with some better ideas than you had. Toodle-ooo."
So the problem with that is that the people, after being given this "autonomy" were asked who they wanted as their leader. If I am not mistaken they voted for Arafat. Now why there hasn't been new elections is a question that should be asked as well as why the people haven't rebelled against Arafat's rule.