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The grinding ``camps war'' between Palestinians and the Lebanese Shiite Muslim militia, Amal, appears to be well on the way to settlement. Yesterday, Amal fighters lifted a 14-month siege of Rashadiya refugee camp near Tyre, in south Lebanon. It was the the last of the Palestinian camps cut off by Amal forces.

The Shiite-Palestinian conflict, which dragged on for nearly three years and claimed an estimated 2,500 lives, had defied all earlier peace efforts.

But this time, observers in the region feel prospects for a lasting cease-fire are better, for two main reasons:

Largely because Amal fighters seem to be making unilateral and ostensibly unconditional withdrawals.

There are clear indications that the pullouts have been strongly encouraged by Syria, Amal's main ally, and a crucial and decisive player in Lebanese politics.

Announcing his intentions first on Jan. 16, Amal leader Nabih Berri said the cease-fire was a ``gift to our brothers in the occupied territories.'' He was referring to the Palestinians in the Israeli-occupied West Bank and Gaza Strip, who have waged a protest campaign since early last month.

Few observers doubt, however, that Mr. Berri's decision was prompted by Syria, which has vociferously supported the ``uprising'' in the territories.

``Like all decisions to do with Amal, it was a Syrian decision, not a local one, and the main aim was to avoid further embarrassment for Syria,'' says a Palestine Liberation Organization official.

Some reports have suggested that the move may also have reflected progress in discreet reconciliation contacts between the PLO and Syria. The two have been bitterly at odds since 1983.

``It should open the way for progress in correcting PLO-Syrian relations, at least in Lebanon,'' a Palestinian source said.

But so far, the Palestinians are wary. Although they are theoretically free to venture out of the Beirut camps for the first time in nearly three years, few have done so. PLO loyalists in particular have stayed inside, doubting the intentions of the Syrian troops who now control access. The Palestinians are also fearful of possible revenge by Shiites.

Berri's moves appear to have broken a vicious circle of retaliation. Previous accords had snagged on his insistence that lifting the blockades must be linked to a simultaneous withdrawal by the Palestinians from villages east of Sidon. The Palestinians had seized the villages in November 1986 in response to Amal's siege, and refused to give them up until the blockades were lifted.

``The delay in the past was always because Berri was not serious,'' said one PLO official. ``If he is serious this time, he will be met by a serious response.''

On Jan. 20, Amal and its allies from the Shiite 6th Brigade of the Lebanese Army withdrew from around the Beirut camps of Shatila and Borj el Barajneh, handing their positions to Syrian military observers. Four days after that, similar steps were taken at Rashadiya. Although most of the actual fighting had died down when Syrian troops took some positions around the camps last April, Amal continued to impose restrictions on freedom of movement and the entry of goods.

While women and children were allowed to go out to buy food and carry it back in, men were confined to the camps. No building materials were allowed in to begin repairs on the shattered camp dwellings. Now, committees are being set up to supervise reconstruction. But only once it is well under way, is confidence expected to rise among the thousands of residents.

Although the Palestinians' expansion out of the camps further south near Sidon had given them an extended power base in the area, observers say they will have little choice but to pull back to the camps now that Amal has lifted the blockades.

A number of meetings to that end have already been held by Palestinian and Amal officials and local Sidon leaders. On Sunday, Palestinian guerrillas cleared their checkpoints from the main road running through the contested area. But Amal has made it clear that a complete withdrawal is required.

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