Reagan outlines views on arms talks with Russians, protecting Gulf oil, slowing Israeli settlements; President also tells five newsmen he will stick to 1983 balanced budget pledge

President Reagan has come to the conclusion that Israel's accelerated settling of the West Bank, while "not illegal," is "ill advised" and "maybe . . . unnecessarily provocative."

This note of caution on Israeli settlements is a new development, a variation from his consistently strong support for that nation expressed again and again during the campaign.

The remark came in an interview with five reporters -- from The Christian Science Monitor, the New York Times, Time magazine, the Wall Street Journal, and the Chicago Tribune -- the first of a series of interviews Mr. Reagan will be giving to small groups of journalists.

To a question about whether he would pursue an "evenhanded" policy in the Mideast, the President said:

"I believe we have, No. 1, a moral commitment to see that the state of Israel has a right to continue as a nation." He then added: "But I also feel that morally the United States should do everything it can in an evenhanded manner to bring peace to the Middle East."

When asked if he would be willing to sit down at any time with the Soviets to talk about limitation of arms, Mr. Reagan replied:

"Yes, I think realistically we all know that there is a certain amount of discussion that has to take place before you get to the framework of a negotiating posture, and anything along that line, discussions leading to that that they want to get into, is fine with me."

Asked about his plan to keep a US "presence" in the Persian Gulf area to keep the oil flowing to the United States, Mr. Reagan said that he did not have in mind "the stationing of enough American troops that you say we could stop the Soviet Union if they set out to advance logistically. We know that we couldn't do that."

"What is meant by a presence," he said, "is that we're there enough to know, or for the Soviets to know, that if they made a reckless move, they would be risking a confrontation with the United States."

Wouldn't such a presence, one reporter asked, simply be seen by the Soviets as an empty threat?

"Well, it's not -- you don't just plant a flag in the ground and walk away and leave it. There would be Americans there, and I think there should be a kind of an American presence. That's what we're doing right now with the Navy in the Indian Ocean. But I think we need a ground presence also.

"But it's based on the assumption, and I think a correct assumption, that the Soviet Union is not ready yet to take on that confrontation which could become World War III. They would like to be able to continue making gains without conflict, and I think a presence there indicates that, all right, this is of interest to our national security, our presence there, and they're going to have to take that into their computations."

Wasn't the President now dampening hopes for quick remedial action on the economy when he himself raised these hopes during the campaign?

"Well, yes, but our plan, if you will remember, that we introduced, envisioned balancing the budget by 1983. I said that we had hopes that we could do it even sooner than that.

"One of the things I have not retreated from is the 1983 figure nor have any of our people. Now, that's hardly a quick fix. But I'm not as optimistic about advancing it beyond that because since I introduced that economy plan, there was a drastic change in the size of the budget and in the estimate of revenues."

Mr. Reagan said he needed to reassess his appraisal of the economy from a few months ago "only because of this difference in what the figures that we were looking at then and what they really turned out to be . . . ."

The interview was held in the Oval Office. Mr. Reagan sat on a sofa with reporters sitting next to him and on another sofa a few feet across from him.

He was, as usual, very friendly. The President smiled frequently and poked a little fun at the newsmen as they arrived, and when they departed. The setting was very informal, with Reagan visibly and successfully seeking to make his guests feel at home.

The President was asked several questions about the economy. But his responses revealed little new information except when he indicated he had all but abandoned the idea of balancing the budget before 1983. Previously he had indicated he might be able to do so before then.

Continuing on the Mideast situation, the President said "we have to get over the hurdle of those nations in the Middle East that refuse to recognize the right of Israel to exist. Peace will come when that first step is taken."

Of the West Bank settlements, he said: "I do think, perhaps now, this rush to do it and this moving in there the way they are is ill-advised because if we're going to continue in the spirit of Camp David to try to arrive at peace, maybe this at this time is unnecessarily provocative."

Do you have any moral feeling toward the Palestinians and their aspirations? Mr. Reagan was asked.

"No. I can recognize that and I know that that's got to be a part of any settlement. I think . . . that here again there is the outspoken utterance that Israel doesn't have a right to exist. There is the terrorism that is being practiced by the PLO.

"Of course, I never thought that the PLO had ever been elected by the Palestinians. Maybe it is recognized by them as their leadership, but I've never seen that that's been definitely established.

"But, again, it starts with the acceptance of Israel as a nation. I do think also that in the past the refugee problem has been used by a number of the Arab states as propaganda- wise to bolster their position and make a scene as if Israel is responsible for this, and all we have to do is go back and look at the record again and we find that Israel literally begged them to remain as part of Israel -- that they would have citizenship rights there if they stayed."

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