The recent summit talks between Morocco and Algeria - the first since the two countries severed diplomatic relations seven years ago - have produced a formula to resolve the conflict in the Western Sahara.
Negotiations to end the Saharan war are expected to begin within two months, well-placed Moroccan sources say.
The negotiations, sponsored by Morocco and Algeria, will be conducted by the Polisario Front, the Algerian-supported liberation movement in the disputed area , and the Consultative Council set up by King Hassan in El Aiun, the capital of the Moroccan-controlled part of the former Spanish colony.
Secret negotiations between a representative of the Polisario Front and Moroccan Interior Minister Driss Basri during the past five months paved the way for last month's Algerian-Moroccan summit, the sources said.
The Moroccan chief of operations against Polisario, Gen. Ahmed Dlimi, who died in a mysterious road accident earlier this year, is reported to have participated in the secret talks with Polisario. His seat has been given to Reda Guedira, one of King Hassan's closest aides.
But Hassan paid a price for the summit with Algerian President Benjedid: Morocco had to abandon its refusal to talk with Polisario. The negotiating formula proposed by King Hassan allows Algeria to save face in its claim that Polisario represents the Sahrawi people. Algeria, tired of the seven-year-old desert war, has taken a low-key approach to the conflict in the past year.
Although Algeria recognizes the Sahrawi state, Algerian officials privately emphasize that their demand for self-determination for the Sahrawi people does not necessarily imply independence. They say they would accept Moroccan control of the Western Sahara if the Sahrawis voted in favor of this in a referendum.
Morocco views the Benjedid-Hassan meeting as a tacit Algerian acceptance of Moroccan claims that the war in the Sahara is a battle between Morocco and Algeria, not between Morocco and the Polisario Front.
Polisario has reacted to the summit with a flurry of contradictory statements. The pro-Libyan faction fears that Algeria may further reduce its support for Polisario, while pro-Algerian guerrilla spokesmen hope the summit may be ''the first step toward a settlement.''
Both factions of the guerrilla movement concede they have been unable to penetrate the several hundred miles of Moroccan-built sand and rock wall protecting the Saharan phosphate deposits. But Polisario denies it has lost the war it launched when Spain divided its former colony between Morocco and Mauritania.
Moroccan sources say Morocco is ready to cede the part of Western Sahara annexed by Mauritania in 1976. The proposal, according to Arab diplomatic sources, will be discussed at a tripartite Moroccan-Mauritanian-Algerian summit in the near future. Moroccan Foreign Minister Mohammed Boucetta visited Algiers recently to prepare for the summit. He is also reported to have discussed the reopening of the Algerian-Moroccan border and the restoration of diplomatic relations between the two countries.
King Hassan, according to well-informed sources, has pinned his hopes on Polisario's inability to win the war and on a widening of the split between the pro-Libyan and the pro-Algerian factions within the Polisario Front. ''We are not in a hurry,'' a well-placed Moroccan said.