US seeks to meet Jordan halfway. Shultz promoting Israeli-PLO flexibility on terms for negotiations

Two principal issues will have to be clarified if and when the United States meets with a Jordanian-Palestinian delegation to lay the groundwork for peace talks with Israel. The first is whether there is a clear commitment from Yasser Arafat, leader of the Palestine Liberation Organization, to accept UN Resolutions 242 and 338 and to negotiate with Israel. The resolutions call on Arab countries to recognize Israel in exchange for territory Israel has occupied since 1967. King Hussein says that Mr. Arafat does recognize these resolutions and Israel's right to exist, but the PLO leader has not said so publicly.

The second issue is how to get around the mechanism of a prenegotiating international conference on the Middle East that would include the Soviet Union, a conference that King Hussein seeks but that Israel opposes. The US also rejects such a conference but now indicates that some other formula of international support might be found to meet the Jordanian requirement.

Diplomatic observers are quietly encouraged by the steps unfolding in various capitals to revive the peace process. Following King Hussein's recent visit here, US Secretary of State George Shultz told Israeli Prime Minister Shimon Peres that King Hussein is willing to commit himself to direct talks with Israel.

According to an Israeli press report, Mr. Shultz's letter stated that the Jordanian leader's statements were ``more far-reaching than any other Arab leader has made in public in recent years.'' This suggests that Washington is nudging the Peres government to accept the King's general approach and respond positively.

Administration officials in fact stress that, with Israel withdrawing from Lebanon this week and now in an improved economic situation, it is in a better position to start a negotiation. ``You won't have a better government than the Peres government,'' says one official. ``So things are opening up somewhat.''

Israeli reaction to the Shultz letter is said to be ambivalent. A sensitive problem for the Israelis is the composition of the Jordanian-Palestinian delegation with which it would negotiate. The US is prepared to have members of the Palestine Liberation Council, the PLO's legislative arm, serve as members of the team.

But many Israelis, including Foreign Minister Yitzhak Shamir, reject any Palestine National Council representation. On the other hand, Defense Minister Yitzhak Rabin, visiting Washington, said Monday that Israel rejects any participation by Palestinians linked to the PLO -- a statement that leaves open the possibility of Palestine National Council members, not all of whom are affiliated with the PLO.

``We wouldn't mind if Jordan will bring Palestinians, leaders of those who reside in the West Bank or the Gaza Strip and others, as long as they are not PLO members,'' Mr. Rabin said on ``CBS Morning News.'' As for an international conference, there are indications that this dilemma could be resolved if the Soviet Union reestablished diplomatic relations with Israel. The Israeli Cabinet has issued a statement saying that Israel views a conference with countries ``that do not maintain relations with Israel'' as an unacceptable framework for peace.

Diplomatic experts view this as added Israeli pressure on Moscow. There are some signs that the new Soviet leadership may be moving in this direction.

An international conference on the Middle East under UN auspices was held in December 1973 when the US and the Soviet Union invited Egypt, Syria, Jordan and Israel to attend.

``That mechanism still exists,'' says Joseph J. Sisco, a former US diplomat involved in Mideast neagotiations. ``Now there would be a fresh basis for the conference if things moved along the Hussein proposal, because the five permanent members of the Security Council would be involved.''