The current talks are about extending Palestinian self-rule to much of the rest of the West Bank.

As Yasir Arafat formally extended Palestinian self-rule to this city today, his Muslim opponents said they would form a political party to run in planned Palestinian elections.

Foreign Minister Shimon Peres said Saturday it was time for Israel and the PLO to push ahead with negotiations on extending Palestinian self-rule, following its launch in Jericho and Gaza.

They both condemned the murderous attack and, after Israel had buried its dead, resumed negotiations on extending Palestinian self-rule.

Negotiations are then to start on extending self-rule throughout the West Bank.

The Administration has adopted a similar approach toward Israel's agreement with the P.L.O. on extending Palestinian self-rule in the occupied territories.

As for the tortuous talks on extending Palestinian self-rule to most of the West Bank, Mr. Rabin made clear that there was no question of abandoning them now.

Theory vs. Reality Now, the two sides intend to move on to the next phase of negotiations: extending self-rule beyond Gaza and Jericho to encompass the entire West Bank.

Israelis continue to have security fears, and Palestinians question Israel's sincerity about extending Palestinian self-rule of the last 10 months beyond Gaza and the West Bank enclave of Jericho.

The attack came on the day before Israeli and Palestinian negotiators were to have reached an agreement on extending Palestinian self-rule to much of the West Bank.