Libya, terrorism, and the Iran-Iraq war notwithstanding, the Middle East continues to hold low priority on the administration's foreign policy agenda. President Reagan in fact appears to be yielding his executive power in Mideast policymaking to the Congress, where domestic election politics now dominate legislative decisions.
This is the assessment of many diplomatic observers following Congress's rejection of Mr. Reagan's plan to sell $354 million worth of advanced arms to Saudi Arabia. Both the Senate and the House voted this week against the sale.
This is the first time Congress has rejected an arms sale outright. Earlier this year congressional opposition forced the White House to postpone the sale of weapons to Jordan, even though the President viewed the sale as important to bolstering Jordan's hand in Mideast peace efforts.
On the Saudi issue, the President has promised to veto the ``disapproval resolution'' that Congress adopted. The question will then be whether he can beat back efforts to override the veto. To do so, say congressional sources, his aides will have to exert far more energy on Capitol Hill than they have to date.
But Reagan's strategy from the start apparently has been to wade in on the post-veto battle rather than expend political capital on the initial votes. Following a presidential veto, lawmakers could claim they opposed the sale and demonstrated their support of Israel but ultimately had to go along with the President's wishes.
Mideast experts see the Saudi issue and the administration's laid-back approach as symptomatic of a vacuum in thinking on long-term US strategic policy in the region. By blocking sales of antiaircraft and antiship missiles to Saudi Arabia, say experts, the US in effect would block availability of its own deployed missiles in the event of a crisis in the Persian Gulf region.
``The Senate has voted against the Saudi payment for missiles which we would have predeployed to meet our own objectives,'' says Anthony Cordesman, an authority on the Middle East arms balance. ``It is clear that we have no way to enforce what our goals are in the area.''
In Mr. Cordesman's view, the administration is systematically pushing the moderate Arab states into an anti-US and anti-Israeli posture at the very time when Syria is building up its military presence in the area.
``The Saudis are extremely angry,'' says Cordesman, a vice-president of the Eaton Analytic Assessments Center. ``They feel the Reagan administration is letting the relationship slide.''
If the sale does not go through, experts say, the long-term economic and diplomatic consequences could be serious. The Saudis will turn increasingly to Britain and other West European countries for weapons. They may also feel compelled to strengthen ties with Syria, establish relations with the Soviet Union, and back away from cooperative defense efforts in the Gulf.
``There'll be a further erosion of that special relationship,'' says a congressional expert. ``Then when the oil problem is back in a few years, the West will be in trouble.''
Ironically, Israel and the American-Israel Public Affairs Committee, a powerful pro-Israeli lobby, have not actively opposed the Saudi sale. Congressional observers speculate that they are more interested in blocking delivery of five AWACS early-warning aircraft sold to Saudi Arabia in 1981 and have saved their fire for this issue.
Meantime, interest in a Mideast peace process appears to have all but vanished. Except for a low-key effort to nudge along the recent Jordanian peace initiative, the Reagan administration has not given the Arab-Israeli conflict the attention of previous administrations.
Analysts note the absence of pressure on the administration to become engaged in a peace effort. Polls taken since the US strike on Libya show a rise in public support for Israel as the only Mideast country that backed the President.
Concern about terrorism and the phenomenon of Islamic fundamentalism has helped fuel a negative perception about the Arab world, say experts. The public and many lawmakers tend to make no distinction between radical and friendly Arab countries.
In Congress, those who opposed the modest sale of missiles to Saudi Arabia argued that the Saudis had made no contribution to the Mideast peace process and that the missiles could end up in the hands of terrorists. Saudi Arabia's support for Libya and its funding of the Palestine Liberation Organization also were cited.
So the administration faces tough sledding in the showdown with Congress. The House rejected the arms sale by 356 to 62 -- 67 votes more than needed to override a presidential veto. The Senate vote was 73 to 22, six votes more than needed for an override.