Israel insists on border 'security,' whoever runs Lebanon

''Of course, all of us want to get out of Lebanon,'' Israeli Prime Minister Yitzhak Shamir declared when asked about Israel's occupation of southern Lebanon.

But for Israeli troops to pull out, there will have to be ''security arrangements to protect Israel's northern border from terrorists,'' Mr. Shamir told a group of Western reporters in Jerusalem this week.

And, he said, there will have to be ''an agreement between the parties on the ground'' in Lebanon, including Syria. Throughout the interview, Shamir stressed repeatedly - as do other senior Israeli officials - that Israel does not seek to dominate Lebanon, but merely wants to protect itself from terrorist attack. But he did not give much indication of hope for the immediate future.

Mr. Shamir spoke just as Lebanon's Cabinet was disintegrating and factional fighting around Beirut was sharpening. He said a withdrawal of the multinational peacekeeping force from Beirut - especially the American contingent - would be seen as ''a Syrian and Soviet victory that will have very great repercussions on the situation in all the Middle East.''

The depth of Israeli public feeling on Lebanon was made clear with a protest march last weekend by 50,000 members and supporters of Israel's ''Peace Now'' organization. A year ago, antiwar activists here were heckled and assaulted. One was killed by a hurled grenade. This year, there were no such attacks.

Former Prime Minister Yitzhak Rabin says that of all Israel's problems today, ''the crucial one is the economy.'' Mr. Rabin, a Labor Party member of parliament, notes that the condition of the economy is also linked with Israel's role in Lebanon and the broader Arab-Israeli peace process that continues to move at a very slow pace.

Mr. Rabin says the presence of Israeli troops in Lebanon costs $1 million a day, a figure confirmed by Western sources. But he points out that it is difficult to cut Israel's defense budget while the country remains militarily involved outside its borders. Defense accounts for one-third of all national spending and one-fourth of a gross national product that has seen very little expansion in the past two or three years.

On the domestic political scene, opinion polls show the ruling Likud coalition would lose if elections were held today. There is a growing movement in the Knesset (parliament) to force early elections this year. Economic problems are longstanding and deep-seated. Western diplomats expect inflation - which stood at nearly 200 percent in 1983 - to top even that staggering figure by half again as much this year.

All of this has had a clear impact on the Israeli people.

''The mood of Israel in the past six months - and especially in the past three months - has turned remarkably inward,'' said a key Western diplomat with many years of experience in the region.

''(Army) reservists keep coming back (from Lebanon) and saying, 'It's hopeless,' and this adds to Israel's frustration about being in Lebanon.''

Even so, the diplomat adds, the more important issue is becoming the economy, which is ''on everybody's mind.''

In the interview, Prime Minister Shamir said he would prefer not to call elections before November 1985 when law requires they be held. But he acknowledged that the Likud coalition in the Knesset is shaky at best, with a majority of four votes out of 120. His party needs time mainly to set the economy straight, he said, noting the influence of Lebanon's troubles on Israeli public opinion.

On the issue of the West Bank, which Israel has occupied since 1967, Israel will not pull out if the military and government have their way.

''This area provides us with minimal strategic depth in order to defend against attack,'' says military spokesman Col. Ra'anan Gissin.

He adds that without the addition of the West Bank to Israeli territory, 67 percent of the country's population would be in a strip of land just a short tank drive from border to sea.

Even to suggest that Israel ought to freeze settlement expansion while the question of a Palestinian homeland is discussed, said Prime Minister Shamir, would show that ''we are giving up our rights to this territory.''

But, says Former Prime Minister Rabin, ''the time has come to cut losses'' on Lebanon, and perhaps more openly acknowledge that there may come a time of peace in the West Bank with ''Israelis living under Jordanian sovereignty just as there are Jordanians living under Israeli sovereignty.''

This view is strongly held among many here.

Senior officials here are not pleased about talks between Jordan's King Hussein and Palestinian leader Yasser Arafat.

''For me, there is no difference between Arafat as a moderate and Arafat as an extremist,'' said retired Gen. Benjamin Ben Eliezer, coordinator of Israeli activities on the West Bank and Gaza Strip.

''When there is no more risk, the majority of Israelis will be ready for compromise.''

Shamir says: ''Arafat would mean failure for any peace effort.''

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