INTERVIEW WITH MEGUID. US image on the rebound following staff shake-up, top Egyptian official says

The Reagan administration's recent staff changes are beginning to restore some of the credibility that the United States lost here over the Iran arms scandal, according to Egypt's foreign minister. In an interview yesterday, Foreign Minister Esmat Abdel Meguid praised what he termed Mr. Reagan's ``very swift and very clear'' moves to shake up the White House staff following the disclosures that the US secretly sold arms to Iran.

Dr. Meguid said that Egypt welcomed the replacement of Lt. Col. Oliver North, Rear Adm. John Poindexter, and others implicated in the Iran-contra arms affair. It was the first time an Egyptian official had indicated that US credibility is recovering in the eyes of one of the US's most important friends in the Arab world.

Egypt, which supports Iraq in its war with Iran, harshly criticized the Reagan administration after the Iran-contra arms affair started making headlines last November. It joined Jordan in saying that the US had been discredited by working with Israel to sell the arms.

But Meguid was upbeat yesterday in his assessment of Reagan now, and of the US President's chances to help bring Israel, Israel's Arab neighbors, and the Palestinians to a peace-negotiating table in the last years of his administration.

``To change ... his immediate entourage, I think this is very effective,'' said Meguid, who spoke with the Monitor at the Foreign Ministry. ``He [Reagan] is now surrounded, I think, by very high-quality type of people.''

``It is not for me to pass judgment, that is for you, the Americans,'' Meguid said. ``But as an observer of this, it means that ... there is no doubt that Secretary of State [George] Shultz and Defense Minister [Caspar] Weinberger will play a more active role. For an observer, yes, surely there is a desire for the President to change and seek the advice of people with experience - professionals.''

Meguid said Egypt already has detected new US flexibility on the issue of convening a Middle East peace conference. He said US State Department envoy Wat T. Cluverius was in Cairo to meet with Egyptian officials and explore conference options.

Jordan and Egypt both advocate the convening of an international conference composed of the five permanent members of the UN Security Council, plus the parties to the Arab-Israeli conflict. Such a conference, the Egyptians and Jordanians say, is the only option available to expand the peace process started when Egypt negotiated a peace treaty with Israel under US auspices in 1978 and 1979.

``We have seen flexibility in [Israeli Foreign Minister Shimon] Peres during his last visit here, so why whould the US also not show flexibility?'' Meguid asked rhetorically. He was referring to the February visit to Cairo by Mr. Peres, during which the Israeli foreign minister endorsed convening an international conference that would lead to direct Israeli-Arab negotiations. Peres's endorsement of such a conference produced strains in Israel's government, because the hard-line Likud bloc that composes one-half the Israeli Cabinet opposes Israel's participation in any international conference.

Meguid said that despite Likud opposition to a conference, he is encouraged by what he called ``Israeli elements who are working for peace.''

Meguid pointed to two other developments that he saw as signs of ``a sense of mobility now, more than this total deadlock that we had a few months ago.''

The developments were:

Reports that the Soviet Union is continuing secret talks with Israeli officials.

A recently published interview with Palestine Liberation Organization chairman Yasser Arafat which quoted him as willing to designate non-PLO Palestinian representatives to an international peace conference.

The Israeli-Soviet talks are an important issue because Israel refuses to be present at an international conference attended by the Soviet Union unless Moscow restores full diplomatic relations with Israel and allows Soviet Jews to emigrate.

In Mr. Arafat's interview with a news agency, the chairman reportedly said he would be willing to allow Palestinians who were not PLO members represent Palestinians at an international conference, as long as they were approved by the PLO.

One of the chief stumbling blocks to convening a peace conference is Israel's refusal to sit with the PLO and the PLO's refusal to allow any non-PLO Palestinians to negotiate in its place.

In an interview with the Monitor in Tunis (see Page 9), Arafat denied he had made such concessions.

Meguid said yesterday that Egypt was seeking clarifications about the news agency interview. He expects to meet with Hani Hassan, a senior Arafat aide who is currently in Cairo, to see whether Arafat is indeed willing to let non-PLO Palestinians attend a conference.

If the news report is true, Meguid said, ``then it is a real breakthrough.''

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