Syrian President Hafez Assad's talks in Riyadh Dec. 22 with King Khalid and Crown Prince Fahd of Saudi Arabia are the most significant inter-Arab development since Israel's virtual annexation of the Golan Heights last week and the earlier breakdown of the Arab summit in Morocco at the end of November.
Obviously the two sides will be discussing how best to pick up the pieces in the wake of both these developments, each of which was a setback to the Arab cause.
Syria and Saudi Arabia are the two most important Arab governments in the Middle East that have hitherto boycotted and opposed the Camp David peacemaking process. Most observers agree that if there is ever to be an effective overall Middle East settlement, they must be associated with the process - together with the Palestinians.
It is significant that Mr. Assad has journeyed to Saudi Arabia - and that the Saudis are receiving him. This indicates that each party recognizes the importance of the other in today's critical situation in the Middle East.
Mr. Assad has arrived in Saudi Arabia as:
* The party most directly aggrieved by Israel's action over the Golan Heights , since the latter are Syrian territory under Israeli occupation since the 1967 war. As such, Mr. Assad will have Saudi sympathy and support.
* The party, who by failing at the last minute to turn up at the Arab summit in Morocco, added the last straw that resulted in that gathering's failure even to consider Saudi Arabia's eight-point peace plan for the Middle East. To that extent, Mr. Assad could be expected to be the target of Saudi irritation.
The two questions needing early decisions - on which Syrian-Saudi agreement would boost the Arab cause - are:
1. The tactics to be used in the United Nations if, as expected, the scheduled Security Council meeting on Jan. 5 is faced with an Israeli refusal to rescind its action on the Golan issue.
2. Whether and how best to resurrect the Saudi Middle East peace plan.
The second of these two questions is likely to be discussed in Washington next month when Crown Prince Fahd is scheduled to have talks with President Reagan in the White House. The Reagan administration had shown qualified interest in the plan in the fall.
The Israelis will be watching with more interest than most the current talks in Riyadh and the planned Reagan-Fahd White House meeting in January.
Most Israelis are determined to keep the Middle East peacemaking process strictly within the letter of the Camp David formula. They are particularly apprehensive about any move that might try to amend that formula so that the sensitive Palestinian issue comes under negotiation in a wider forum. That is exactly the direction in which they feared Mr. Reagan might be heading when he showed interest in the Saudi peace plan.
In this context one understands the remarks of former Israeli Prime Minister Yitzhak Rabin on returning to Israel Dec. 21 from a visit to the US. He said the Reagan administration was showing signs of departing from Camp David. He thought the way in which Prime Minister Menachem Begin had moved on the Golan question would help give the US an excuse to go that way.
What Mr. Rabin did not mention was that Mr. Begin - despite his precipitate action on Golan - can still hold the US and Egypt hostage in the Camp David context. And he can do that by using any US or Egyptian countermove on Golan as a pretext not to complete Israeli withdrawal from Sinai as scheduled in April.
But none of this minimizes the role of Syria as a requisite participant in the eventual overall peacemaking process. The Syrians have a direct interest in it because the Israelis captured territory (Golan) from them in 1967.
For all Begin's virtual annexation of Golan, the basis of Arab-Israeli peacemaking has been established by UN Security Council resolutions that would trade occupied territory by Israel in return for the peace with its neighbors needed for long-term Israeli security. If Israel does not leave room for such trading with Syria, it is hard to see how peace can ever be achieved on that particular front.
It is widely overlooked that Syria was involved in then Secretary of State Henry Kissinger's shuttle diplomacy of 1973-74. An initial Israeli withdrawal from Golan was negotiated and effected in 1974.
Interestingly, Mr. Kissinger originally had no intention of including Syria in the negotiations. He thought President Assad's anti-US rhetoric guaranteed that no American secretary of state would be welcome in Damascus.
It was the late King Faisal of Saudi Arabia who persuaded Secretary Kissinger otherwise - and of the need to include Syria as a principal in any overall Arab-Israeli negotiations.
The Saudis have never lost sight of this. But with his peace plan of this year, Crown Prince Fahd may have made the mistake of trying to substitute petrodollars for active and substantive diplomacy as an equal in dealing with President Assad. Presumably the Saudis may be trying to correct this in their current talks with the Syrian President.