Inside Report (4)

The biggest news to come out of Egyptian President Hosni Mubarak's talks in Washington so far: his advocacy of Palestinian ''self-determination'' and a Palestinian ''national entity.''

To the Israelis, this means a Palestinian state and is unacceptable. US officials tend to play down the Mubarak statements by emphasizing the points of agreement between Mubarak and President Reagan. But US analysts also believe that Mubarak isn't kidding. His statement on the Palestinians, they say, is not just lip service designed to placate other Arab nations. The Egyptian President truly believes that some kind of independent Palestinian state is needed to resolve Arab-Israeli conflict.

Mubarak thus sets himself farther apart from Israel and makes a quick resolution of differences over the -Palestinian issue highly unlikely.