Nicosia, Cyprus — Saudi Arabia is still convinced that a diplomatic flanking movement, not military confrontation, is the only way of challenging Israel.
The kingdom's ubiquitous, white-robed princes have been making that point to the more radical Arabs of the Middle East both before and after the Arab summit in Morocco collapsed last November, and since Israel's virtual annexation of the Golan Heights in December.
The Saudi plan that embodies this view is Crown Prince Fahd's eight-point proposal, which would trade Arab recognition of Israel for Israeli withdrawal from land it captured in 1967 and for establishment of a Palestinian state.
There are three important Arab countries that have needed Saudi convincing. These are Libya, Iraq, and Syria. This is how the Saudis are approaching the three:
* Libya and Saudi Arabia are preparing to restore diplomatic relations, which were cut in 1980. By ending rhetorical hostilities with Col. Muammar Qaddafi, and possibly by supporting Colonel Qaddafi in his disputes with the Reagan administration, the Saudis are seeking to neutralize Libyan objections to the Fahd plan.
* Saudi Arabia and the Gulf states are stepping up their financial and moral backing of Iraq in the face of its costly war with Iran. By aiding President Saddam Hussein on what he sees as ''the eastern front of the Arab homeland,'' the Saudis may be able to remove Iraqi objections to letting the Saudis lead the diplomatic maneuvering against Israel.
* And most importantly, Syria, which was primarily responsible for the collapse of the Moroccan summit, is being assured a hearing -- at a future resumed summit -- of its argument that should diplomacy fail, military confrontation should be used against Israel.
If the Libyans, Iraqis, and Syrians can be convinced that the Fahd plan should be a common Arab position, the other radicals -- Algeria, South Yemen, and the Palestine Liberation Organization -- are thought likely to go along also.
After the Arab summit was suspended, Saudi officials maintained that the Fahd plan was still alive. At the time, many Arab and Western observers chuckled knowingly, convinced that the summit's ''suspension'' was simply a face-saving device disguising the rejection of the Saudi plan by Arab radicals.
But even with the bellicose rhetoric that has followed the Israeli annexation of the Golan Heights, the Saudis have asserted to diplomats and journalists that the Fahd plan lives. The latest such statement came from Saudi Foreign Minister Prince Saud, who said the Fahd plan does not just imply recognition of Israel but ''accepts it.''
Western diplomats in Israel and the Arab world point out that the Saudis may be edging toward an even more outright recognition of Israel. By so doing, they would be playing the Arab card contained in United Nations Resolution 242 of 1967. This resolution exchanges Arab recognition of Israel for Israeli withdrawal from territory it captured that year.
''The Israelis know full well that if the Arabs recognize Israel's right to exist, the other side of the coin is that Israel withdraw to its 1967 boundaries ,'' a diplomat in Jerusalem told the Monitor recently.
Seen in this light, the Saudi campaign to get the Arab world to adopt the Fahd plan -- which essentially is just a restated UN Resolution 242 -- reflects the Saudi strategy to force Israel to play its card: withdrawal from the occupied territories.