IN announcing his acceptance of President Bush's compromise proposal to convene a Middle East conference, President Hafez Assad of Syria reaffirmed his country's position that notwithstanding the limited role of the United Nations, the peace negotiation will have to be based on UN Resolution 242. That is, the principle of trading peace for territory remains the centerpiece for any future settlement of the Israeli-Syrian conflict. The question is how Israel's security needs can be reconciled with Syria's claims of sovereignty over the Golan Heights. By accepting the Bush proposal, the Syrian leader has sought to position himself at center stage, taking further advantage of the prevailing post-Gulf-war conditions. The destruction of Iraq's military power has left Syria with the most potent Arab military force facing Israel. But President Assad fully realizes that the military option, if there ever was one to solve the conflict with Israel, is no longer viable. The Soviet refusal to help Syria attain military parity with Israel and the United States c ommitment to Israeli security so evident during the Gulf crisis, further convinced Assad of the futility of the use of force. Moreover, the enforcement of UN resolutions against Iraq gave rise to Assad's hopes that international pressure will be brought to bear on Israel, provided Syria limits its claims to UN Resolution 242. The skeptics among Israel's ruling Likud Party, however, cite two decades of merciless Syrian bombardment of Israeli settlements from the highlands of the Golan before 1967. And Israelis have a deep distrust of Syrians because many extremist Palestinian groups still find sanctuary in Syria and because Syria's military doctrine and orientation remain against Israel in every detail. In addition, the Golan settlers (nearly 11,000) exert considerable pressure against any territorial concession and are supported by a majority of the Israeli public. Relying on these sentiments, the Israeli government was reluctant to accept Bush's proposal, fearing it would lead to an interpretation of Resolution 242 requiring Israel to surrender all land captured in 1967, including the Golan. Many Israeli military experts, however, including Israel's Health Minister Ehud Olmert and Gen. Don Shomron, who has recently retired as Israel's defense forces chief of staff, argue that strategic territory is important only in the absence of peace. If peace prevails and other security measures are in place - such as electronic surveillance, permanent demilitarization, on-location verification, and the stationing of early warning systems alongside the UN troops - the importance of the territory as a str ategic asset diminishes considerably. For Syria, regaining the Golan is a matter of national pride. No Syrian leader can make peace with Israel without restoring the Golan, particularly since it was always Syrian territory and no country has recognized its annexation by Israel. THE question, therefore, is whether there are options that will satisfy Israel's security needs and at the same time restore Syria's sovereignty over the Golan in exchange for a comprehensive peace. Consider this: Israel could surrender the Golan Heights to Syrian sovereignty under a UN agreement. Syria would then lease it back to Israel for an extended period of time (say 50 years) for which Syria would be handsomely paid. The enforcement of such an agreement would be left in the hands of the UN Securit y Council where the US enjoys a veto power. Neither Israel nor Syria would have the right to change or revoke it unilaterally; the lease could be renewed, extended, or modified only by mutual agreement. As long as peace prevails with trade, cultural exchanges, travels, and investments, both sides would develop extensive vested interests in their relationship and the Syrian flag would fly on the Golan for the Syrian people to see while Israel's security is not compromised. In these confidence-building years, the Golan settlers may relocate while fully compensated in the same manner as the settlers of Yamit and other settlements in the Sinai. Those settlers at first vehemently resisted relocation but then were persuaded to leave in accordance with the Camp David accords. In the end, Israel and Syria will have to compromise. The Syrians may not be able to regain the Golan Heights in any other way if they choose to end their state of belligerency against Israel. The Israelis, who have not known peace since the creation of their state in 1948, may yet find that no piece of land could in the long run substitute for real peace.