Sen. Charles H. Percy (R) of Illinois, chairman of the Senate Foreign Relations Committee, says he still thinks there will be a Reagan-Brezhnev summit meeting this year. The senator had made a similar forecast earlier, but the Reagan administration did not confirm it.
However, in an interview with the Monitor, Senator Percy said, ''I think there will be (a 1982 summit) still.''
He says that he has ''reconfirmed'' that Mr. Brezhnev ''at this time continues to be the decisionmaker in the Soviet Union that is most important.'' And he says he is convinced that ''Brezhnev in his lifetime would like to have an arms agreement'' and that the Soviet leader will meet with Reagan this year to try to hammer one out.
The veteran Republican senator, who has long been influential on Capitol Hill in foreign affairs and economic matters, also said:
* President Reagan's programs must turn the economy around by the end of the year. ''If not,'' says Mr. Percy, ''we will undercut many of the kinds of programs that Reagan has outlined. You cannot otherwise afford the defense goals that he has set down. You cannot then afford many of the things such as foreign assistance . . . that he has talked about.''
* He equates Castro's Cuba with Libya: ''The terrorist tactics that they (Cuba) use are the tactics of oppression which in a sense do not differentiate them from the right. They are, in a sense, playing the role of Libya in the Caribbean area, doing the same kind of thing that Libya has been doing in other parts of the world.''
* Recent on-the-scene observations in the Mideast indicate that there has never been greater willingness ''for Arab countries to recognize the realities of life: that Israel is here to stay, that it is a sovereign nation, that it has certain rights, such as the right to have borders that are clearly defined and the right to live in peace.''
Excerpts from the interview follow:
How does President Reagan's Caribbean initiative relate as you see it to El Salvador? Will it shore up the present regime - and, if so, is this the right direction to go?
It's the only direction to go and it can be the only hope that . . . El Salvador in the long run can attract investment and be capable of producing for trade and having a market for imports.
But the aid part of it has to be emphasized in El Salvador because although it is a country torn by civil strife now (there is still) the hope that it will offer people for development for the future -that will offer everyone a chance for a better life. . . .
In El Salvador . . . there's the extreme left, the guerrillas, actively supported by the Cubans who believe in force, in taking over a nation by force. No - we reject that. Then there's the extreme right, with its oppressive actions: The country has been under the yoke of the extreme right for a long time. That isn't the answer for the future.
So what you're left with is something in the middle which is a long ways from perfect. But even critics of our program down there admit that Jose Napoleon Duarte is a good man attempting to gain more control and direct a program and the goals established by the Congress of the United States. Conditions for our aid were goals that he sat right in on in the Foreign Relations Committee Room. He committed himself to sharing in principle and in detail every aspect of those goals.
What is the threat from Castro's Cuba to the US at this point?
They're the arms merchant and the middle man for Soviet arms. That is essentially their role now.
The terrorist tactics that they use are the tactics of oppression, which in a sense do not differentiate them from those on the right. They are, in a sense, playing the role of Libya in the Caribbean area, doing the same kind of thing that Libya has been doing in other parts of the world.
What do you think that the President meant when he said that the United States will do whatever is prudent and necessary to ensure peace and security in the Caribbean area? Does this imply use of force? Troops?
He does not mean United States troops. It is very clear in my mind that that is not a part of our plan whatsoever - which differentiates our actions in El Salvador from those in Vietnam. He is offering assistance and help to strengthen forces who are working toward a real democracy.
On another subject, the Soviets. You had conversations with Soviet President Brezhnev over a year ago. I wonder, is it possible now for you to say what was said during that conversation, in terms of the possibility of peace and the possibility of Brezhnev and Reagan getting together?
The conversation was held when Ronald Reagan was president-elect. There was a great deal of curiosity about Ronald Reagan as a human being, as a person, what his goals and aspirations might be, and at no time did I ever act as a spokesman for Ronald Reagan . . . .
I made it eminently clear (to Brezhnev) that I felt the policies of the Reagan administration would be sharply defined, and indicated that wars are gotten into many times through miscalculation.
I think the Soviets moved into Afghanistan through miscalculation. They did not really see that the Western world would respond as strongly as it has. And I think they recognize that the response has been a very strong response and a united response.
I projected what would happen if the Soviets used force and moved in with their own troops into Poland: that they should never underestimate what that would mean to the Western world. In (West German) Chancellor (Helmut) Schmidt's views, and I had had dinner with him the night before I left for Moscow, it would change the face of the globe.
The Soviets have not used troops. They have done it another way, an oppressive, repressive way. But clearly they understood that the use of their own troops in Poland would meet with a very united, very strong Western response.
Did you talk at all about the President-elect and Brezhnev sitting down soon and talking about opportunities for peace or nuclear arms limitation?
I do not, as chairman of the Foreign Relations Committee, a separate branch of the government, make appointments for the President. We talked in detail on arms control. I did not speak for the President; but I did quote what he had authorized me to say in publications and statements prior to the election as his views. And I accepted those as his views and quoted those views to Brezhnev word for word from President-elect Reagan: that he wanted arms control, that he wanted arms reductions, not just limitations.
And the President has since demonstrated that by going for the zero option in Europe which has really, I think, met with overwhelming favorable response in Europe and has undercut a great deal of the antinuclear and anti-NATO force-rebuilding feeling in Europe because of the forthrightness of his proposals.
Did you sense, though, in talking with Brezhnev that there isn't any real opportunity for ending this nuclear arms race?
They (the Soviet leaders) have always in their conversations espoused their desire for arms limitations or reductions or control. They have just within the last few days. Brezhnev has again spoken out on the subject. I have no doubt that we will get under way to start talks, I trust this spring. We are in deep negotiations right now on intermediate forces.
Is this the moment, then, senator, for this president and Mr. Brezhnev to sit down. Is this the year?I would hope that sometime in the year 1982 there would be a summit meeting.
Hadn't you indicated earlier that you thought there would be a summit this year?I think there will be still. I think it's highly desirable.
I think that Brezhnev in his lifetime would like to have an arms agreement. I think it would be in the best interest of the world that the arms race be stopped. And ultimately you can only really do this with the two decisionmakers. I (have) reconfirmed that Brezhnev at this time continues to be the decisionmaker in the Soviet Union that is the most important. From every evidence I have he is still very much the major influence in the decisions.
Turning to the Mideast. You recently visited there, right?Yes, that was for 38 days over the Christmas and New Year's recess. . . . I've covered about 14 countries, which embraced Israel and 75 percent of the population of the Arab world. And I met with leaders in each of those countries.
Is any progress being made by this administration toward peace in region?
The most dramatic progress that has been made was the Habib mission which brought about a cease-fire in an area that I visited recently.
I went up to the Lebanese border; went along the whole border; visited in depth three cities there; went into the bomb shelters; went into the schools. (I) saw children being taught in bomb shelters, bomb shelters constructed under every hospital and under every factory; talked to people ranging in age from 6 to 90 who had huddled in those bomb shelters for two weeks without light, poor ventilation, problems with food and water; talked to the widows of people who have been killed. . . .
And since the cease-fire there has not been a single (person) injured, a single (person) dead - since July. The cease-fire is still holding. And I spent a good deal of my time on the cease-fire itself to make certain that we did everything possible, and Israel, and Saudi Arabia, and other countries involved did everything possible, to continue that cease-fire.
The Palestinian question. I think you were one of the very early ones to take a rather unpopular position on this question. When was it that you came back from the Mideast with that view and what did you say at that time?
I said seven years ago that there never would be any peace in the Middle East until we settled the Palestinian problem and that there was some sort of Palestinian homeland.
I wonder why that was so unpopular then, at least in some quarters? It is being said by so many people today.
Well, it just was unthinkable at that time. I said at the time ''Nothing is unthinkable.'' That is what God gave us reason for. You have to think about it.
The question is, what does Israel want? Has Israel changed its goals? The goals for 34 years have been to have the recognition of its sovereignty by the Arab world, by all of its neighbors, the recognition of its right to live behind defendable borders and the right of its people to live in peace.
There will never be that - any of those three conditions will not be assured until such time as there is some place for these Palestinians to go. Not for all 3.5 million of them, of course, but for those who are displaced, who do not have a home and who are really contributing to the disruption and the civil disorder in Lebanon. That war will never be resolved until there is some place for the Palestinians to go.
So many of these issues are interlinked. But Israel can also today recognize that never have I seen the willingness greater for Arab countries to recognize the realities of life: that Israel is here to stay, that it is a sovereign nation, that it has certain rights, such as the right to have borders that are clearly defined and the right to live in peace.
I think the world will see the impact of peace on the Egyptians. I think that the peace is very deeply imbedded in their hearts and mind now.
But how is the Palestinian problem to be addressed?
It has to be by appreciation and recognition that there cannot be a Palestinian homeland created that would be in any way a threat itself to the tranquillity and peace of the area again. You don't resolve the problem in setting up a state that would, for instance, become a sovereign state free to make its own alliances in any way that it wants, such as an arms agreement with the Soviet Union, which would be a threat to the whole area, not just to Israel but to every Arab country that has land and wealth.
(A Palestinian homeland could be a) demilitarized entity for, say, a period of 25 years, linked in federation with some other Arab country that would provide it the economic links and that would enable it to be a homeland with full autonomy over its land, water, and its own government on its domestic issues. But (it) would not be an unguided missile in the midst of the Arab world and a threat to tranquility and peace of all nations in the area.
This has to be the step that is the most difficult one to work toward. But I am convinced that it must be something in-between - probably not making any party completely happy, but a step which each party can live with.Some critics say this president has not really delineated a clear overall foreign policy, that he tends to respond ad hoc. What do you say to this?
I said to Brezhnev that Reagan will not be unpredictable and that he will fight very hard for what he wants. I told him that if for instance you sign up a treaty on arms reduction with Ronald Reagan, I can almost guarantee you it will be ratified by the United States Senate.
How much time does the President now have to turn this economy around so that he can maintain his effectiveness in dealing with Congress?
If we do not turn the economy around, we will undercut many of the kinds of programs that Reagan has outlined. You cannot otherwise afford the defense goals that he has set down. You cannot then afford many of the things such as in foreign assistance - that is, security assistance and economic assistance - that he has talked about.
Well, politically, how much time does he have?
Time is running out. We have to see an upturn in the economy this year.
What is your evaluation of this President?
He probably is the best communicator that we have had, certainly since Franklin D. Roosevelt. . . .
With respect to federalism and the state-federal relationships and state-local relationships, probably President Reagan is superior to virtually all of our presidents in the understanding that he has of that inter-relationship.