THE Middle East peace process has not been moving. Partly because of that, Jordan's King Hussein has proposed an ambitious five-year plan to pump direct economic help to Arabs living on the West Bank and Gaza Strip. The development plan is clearly no long-term solution to the Palestinian problem; it assumes that the occupied territories will stay in Tel Aviv hands for the foreseeable future.
Still, much about the plan makes sense:
The extra help, while expected to fall far short of the $1.2 billion goal, could significantly improve the living conditions of the more than 1 million Palestinians on the West Bank and Gaza. They have been second-class citizens in every sense of the term. The plan's political aim, to expand Jordan's influence and offer an alternative to the Palestine Liberation Organization (PLO)'s Yasser Arafat, has already borne fruit. Three Arabs approved by Jordan have agreed to serve as West Bank mayors. An Arab bank has opened in Nablus.
The Hussein plan also ensures Jordan against an eventual flood of Palestinian refugees - whether expelled one day by a right-wing Israel or squeezed out by a tight economy. Palestinians in Jordan, relatively well off economically, now account for more than half the population; a sharp increase could threaten both the economy and the Hashemite monarchy. Despite his February break with Mr. Arafat, King Hussein still views the PLO as the sole legitimate representative of the Palestinians. His hope is to moderate its stance.
Israel, which has long refused to talk with the PLO, is delighted with Jordan's involvement. Tel Aviv has long tried to increase moderate Arab representation in the territories, with little success.
The US is equally pleased with the development plan, seeing some hope in it for reducing tensions and improving peace prospects. Washington has been giving $14 million a year to improve Palestinian living conditions through voluntary groups in Israel. The US has already made a $4.5 million contribution to Jordan's new plan and will increase the amount to $15 million next year.
But enthusiasm for Hussein's plan is not universal. The PLO views it as a plot to undermine the influence of Arafat, still the symbol of nationalism to most Palestinians. The PLO has become increasingly divided in recent years, and Jordan's plan is playing a role in a new effort at reconciliation.
The Hussein plan, which includes substantial sums for rural housing, amounts to an investment in the status quo. The King says nothing would serve Israeli interests more than if Palestinians were to leave the occupied territories. Amman hopes its plan will remind Israel that one day it must decide what to do about its growing and increasingly youthful Arab population. It is a dilemma most Israeli leaders prefer not to confront.
Nations with a vested interest in peace in the Middle East, such as the US, should not confine their help to economic support of the King's plan. Most successful peace efforts in the past have relied on the help of a third party. Both Anwar Sadat and Menachem Begin made concessions in the Camp David accord to their ``friend'' Jimmy Carter, or because of US pressure, rather than to each other. The Reagan administration has lacked a similarly vigorous commitment to helping both Arabs and Jews in the Middle East find areas of agreement. It is a factor in the current stalemate. The administration's influence, if put to work, could still make a major difference in moving the peace process forward.