Begin fights on, but lack of mandate could prompt new elections in Israel; Few foreign policy changes anticipated if Begin hangs on

The prospect of an Israel with Menachem Begin again at the helm, but kept in check perhaps by a stronger opposition at home, means it will probably be business as usual on key Middle East transactions.

To both admirers and critics the controversial Israeli prime minister is a familiar figure. They know precisely where they stand with him.

Thus Arab-Israel relations are expected to remain on a bumpy but straight course.

"They were the head and tail of the same snake," a Palestinian merchant in Jerusalem says. "But Begin is good for us because the world knows how he is." This view has been echoed by leaders of Arab countries and by the Palestine Liberation Organization.

A Begin government would continue to provide a dynamic tension between Israel and Europe's socalists. It is Shimon Peres, the opposition Labor leader, who is well connected with France's Francois Mitterrand and the socialist and laborites in West Germany and Britain.

The return of Mr. Begin also keeps American-israeli relations familiar enough to open the door for a new Reagan administration peace initiative in the Middle East using existing groundwork. "Better Begin in power than Begin badgering from the opposition," a Western diplomat in Israel comments.

While the Begin-signed Camp David accords would be law even if Begin were not prime minister again, it helps bolster them to have two of the three original signatories, Bein and President Anwar Sadat of Egypt, still in power.

With its stated aim of autonomy for Palestinians in Israeli-occupied territory and a handover of the Sinai to Egypt by next spring, Camp David still can serve as the basis for an Arab-Israeli peace.

To be sure, Begin can be expected to resort to the sword in dealing with Arab states in certain situations -- such as Lebanon, Iraq, and, possibly in the future, Libya, but the gains of the Labor Party behind Peres mean Labor speaks with more authority, for more Israelis, when it warns Begin about the damage he is doing to Israel's standing in the world by provocative acts.

Begin will not necessarily be swayed by Labor's growing influence. As the prime minister said early July 1, if he comes to power via coalition he still will have "the full powers to do what is necessary" without listening to the opposition.

But although Begin seems headstrong, he can be expected to close ranks to some degree once the new government is in power. This will mean taking account of the Perez argument even if it is not his guiding principle.

A Begin government looked most likely July 1, but diplomats and Israeli political observers predicted it would take 10 days or more of political wheeling and dealing before the government coalesces.

Israel's relations with moderate Arab states cannot be expected to warm up much under Begin, but Jordan's King Hussein -- considered a key by the Labor Party and by the Reagan administration to a possible agreement transferring control of part of the West Bank -- has clocked overtime the past year anyway, assuring the PLO and Arab leaders that notions of a "Jordanian option" are erroneous.

Thus, an agreement on the West Bank, if it is to be acceptable in the Arab world, will have to be either genuinely different or stem from the Camp David concept of autonomy for Palestinians.

Major obstacles to be overcome with Mr. Begin back will be (1) his policy of encouraging new Israeli settlements in occupied territory -- some 165 in the past 14 years, (2) lack of effective Palestinian leadership in the territory, and (3) the refusal of Mr. Begin to deal with the PLO, the widely recognized "sole legitimate representative" of Palestinians.

In Lebanon, where the internal situation is improving daily (Lebanese security forces moved into Zahle June 29 and the Syrian siege was lifted the next day), Begin seems to have heeded the US call for restraint. Thanks largely to the efforts of US envoy Philip C. Habib and of Saudi Arabia, an effort is being made to remove the roots of the recent Syrian-Israeli crisis.

Mr. Begin's promise of military action against Syrian antiaircraft missiles is still operative, but Syria now can remove the missiles peacefully if the Lebanese situation stabilizes.

With a Begin government, says a Western analyst, Arab leaders such as Hafez Assad of Syria, Saddam Hussein of Iraq, and Sadat of Egypt, are "getting better at handling the US" by showing moderation against Mr. Begin's volatility -- Mr. Assad in the recent "missile crisis," and Mr. hussein in reaction to the Israel air raid.

And in relations with its key peace partner, Egypt, Mr. Begin faces an Anwar Sadat who was miffed by the timing of the recent air raid on Iraq (just after a Begin-Sadat summit) but who nonetheless promises to continue the peace process.

American analysts see Egypt as slowly strengthening its position in the Arab world -- from which it was officially ejected three years ago -- and therefore showing that diplomacy, not conflict, is the only way to win concessions from Israel.

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