GAZA CITY -- Palestinian leader Yasser Arafat, accompanied by his wife Suha, returned to the Gaza Strip on Tuesday to take up permanent residence and run the Palestinian self-rule government.


Arafat crossed the border from Egypt at the Rafah terminal and was greeted by only two members of the 19-member autonomy government he heads, Justice Minister Freih Abu-Medein and Housing Minister Zakaria el-Agha. Also there was the PLO police chief, Major General Nasser Yousef.


The reception was low-key. Small knots of people gathered along the road to Gaza City, clapping as Arafat's five-car motorcade passed.


There were few flags or banners along the route and very sparse crowds on the streets of Gaza City when the motorcade whisked into the downtown police headquarters.


Arafat made his historic return to Gaza after 27 years in exile on July 1. He left for a week to attend a Paris summit with Israeli leaders, to Saudi Arabia to talk with King Fuad, and to Tunis for a formal departure Monday.


Over 1,000 officials were expected to move to Gaza from Tunis, where the PLO was based for a decade after being driven from Beirut by Israel's invasion of Lebanon. Among those expected Friday were senior aides Yasser Abd Rabbo and Samir Ghoshe.


Arafat was accompanied by his wife Suha, 30, and her sister Hala.


Mrs. Arafat told reporters that both she and her husband were extremely happy to be in Gaza. She said Arafat had looked out at the Mediterranean and told her that for the first time he felt like he was looking at his own coastline.


"He told me that he no longer feels like an exile," said Mrs. Arafat, dressed in a beige suit. She said she would concentrate on women's and humanitarian issues in Gaza.


She was seated with Intissar al-Wazir, known as Umm Jihad, the minister of labor and social welfare and the only woman on the self-rule council.


"We are facing now the challenge of building a Palestinian state. We have to depend on ourselves and not the donors," she said.


Self-rule went into effect in Gaza and the West Bank town of Jericho, an area of 390 square kilometers, after a May 4 agreement reached in Cairo between Israel and the PLO. In making the move Arafat has to make the transition from a guerrilla chief to a government leader. He is faced with enormous problems such as massive unemployment in the Gaza Strip and a powerful Moslem fundamentalist movement that has vowed to continue attacks on Israelis targets.


The subdued greeting for Arafat reflected the widespread skepticism of the Palestinian populace, which has seen speeches and ceremonies but little meaningful increase in jobs or housing.