Two Mideast hard-liners show readiness to bargain; Israel softens on the West Bank -- but not PLO

In apparent response to international pressure -- especially from the United States -- Israel is walking more softly in the Middle East. And ironically, the changes have been initiated by Defense Minister Ariel Sharon, who as agriculture minister in the last government was noted for his hard-line policies on the West Bank.

Signs of softening of Israel's "iron fist" policy in the occupied territories (an Israeli term for the heightened military and police activity that began in April 1980) came Aug. 13. The Defense Ministry announced a more lenient approach toward Palestinians at military checkpoints and promised that Israeli soldiers would not break into schoolhouses in pursuit of protesters.

This does not signal a change in Israel's attitude towards the Beirut-based Palestine Liberation Organization (PLO) or its many followers in the occupied territories. But Israeli political analysts Aug. 13 said they believe the government may be maneuvering back toward a policy of nurturing moderate Arab leaders to create a negotiating party for the Camp David autonomy talks.

Arab leaders on the West Bank were generally skeptical of the seriousness of the move, observers in Israel say. But Bethlehem Mayor Elias Freij, a leading moderate, praised Defense Minister Sharon for making the changes.

Israel has acted with restraint in other ways recently. An Aug. 11 attack by Palestinian guerillas on a military patrol in the upper Jordan Valley has been played down by authorities. The Israeli military admits nine soldiers were injured.A July 29 attack on a tourist bus near Jerusalem also passed without reprisal.

Heretofore, swift, forceful retaliation -- usually against Palestinian staging areas in southern Lebanon -- was a hallmark of the government of Menachem Begin.But Israel for the past three weeks has scrupulously upheld a cease-fire agreement that bans military raids into Lebanon. Diplomats believe Mr. Begin is attempting to counterbalance public-relations losses Israel has suffered recently -- especially in the US -- for a series of aggresive military acts, including the July 17 bombing of Beirut.

Moreover, many Israeli circles have criticized the government this week for rejecting out of hand a peace plan offered by Saudi Arabian Crown Prince Fahd Ibn Abdul Aziz. The Citizens' Rights Movement urged Begin not to cut off discussion on the matter, and Abba Eban, a leading member of the Labor Party, said it was "regrettable" that the government had so toughened its position that it was not taking note of "mental ferment in the Arab world" that Prince Fahd's proposal indicated.

But the new conciliatory gestures towards West Bank and Gaza residents may have another important aspect, diplomats say.Now that Mr. Begin is back in office he is looking anxiously toward April 1982, when he will have to surrender the final third of the Sinai to Egypt.

Without some form of "autonomy talks" -- however limited -- in process, these diplomats say, Egypt's role in Camp David will be practically finished. This would put the Arab world's most militarily powerful nation in a position to pressure Israel to negotiate with the PLO.

Thus, these diplomats say, Mr. Begin needs to continue the detente with Egypt through the autonomy-talk mechanism.