Saudi peace plan brings Arab world to crossroads at Fez summit

Each chance utterance from the lips of Arab worthies around the tidy Moroccan hill city of Fez, each statement cranked out by Arab news agencies scattered from Rabat to Riyadh, is being seized on by journalists here in an attempt to predict the fate of the Mideast issue of the hour: the ''Fahd plan'' for Arab-Israeli peace.

After lengthy preparatory bargaining, the plan was put on the agenda Nov. 24 for consideration by Arab heads of state later this week. Where it goes from there is uncertain, but the mood among moderate Arab delegates, particularly Saudi Foreign Minister Prince Saud, is decidedly upbeat.

This then promises to be one of the most important summit conferences in years, for behind all the maneuvering, is this simple choice: Will Arab nations (with the exception of Egypt, ostracized for its peace treaty with Israel) continue on a course of internal division and unsuccessful confrontation with Israel? Or will they agree to the Fahd plan as an historic, moderate negotiating strategy?

Among Arab diplomats from whom snippets of information and opinion have been gleaned in recent days, there is a real sense of the Arab world standing at a crossroads. If Arab leaders agree to adopt Saudi Crown Prince Fahd's plan then, say Western and Arab Mideast analysts, the next few years could be ones of real bargaining in the Middle East. The Fahd plan essentially implies recognition of Israel in return for an Israeli pullout from occupied territory and for establishment of a Palestinian state with East Jerusalem as its capital. As it stands, 16 of 21 Arab league members, led by Saudi Arabia, appear favorably disposed toward the Fahd plan. Of the remaining five, Syria seems to be leading the opposition. Most informed observers believe the Arab leaders will argue heatedly over the plan, possibly requiring a special committee to resolve differences. Even then they might not reach clear agreement until after the summit is completed.

This means a unanimous Arab strategy may not emerge. But that does not mean the Fahd plan will be finished, many political analysts say. Even if all 21 Arab nations do not agree, the Saudi strategy still could become the operative policy of the 16 moderates.

Saudi Arabia, it is believed, then could try to supplant a waning Camp David with its plan. This maneuver could entail a two-year or more process of Arab-Israeli-United States arguement over what is to be considered negotiable: Jerusalem? Palestinian nationhood? Israeli political and military influence over this new Palestinian entity?

This is why Saudi Arabia is positioning itself as lead advocate for moderate Arabs. If at this summit it can also manage to swing the more radical Arab states behind it, Saudi Arabia would have achieved a diplomatic coup - and one much to the liking of Washington.

How that could occur has produced several interesting theories. One is that in order to win over the radicals, Saudi Arabia is considering negotiations with the Soviet Union toward exchanging envoys. Another is that the Fahd plan could be changed to include a much stronger assertion of the right of Palestinians to their own state - and a lower profile reference to the implied recognition of Israel. A third is an ever popular one in the Middle East: the Saudis would buy off the radicals - primarily Syria - with large sums of oil money.

Which theory is correct depends on whether one holds that the Saudis have done their ground work and truly believe the Fahd plan will fly, or whether the Saudis have put their good name behind the plan without thoroughly analyzing the mood of the radicals. Most observers here accept the former view.

''The Saudis are very cautious diplomats,'' says one Arab journalist. ''They are used to governing by consensus. I don't think they would push for their plan if they didn't already have support lined up.''