An agreement this past week between Israel and Hungary to open diplomatic interest sections in each other's capitals is the latest step toward a possible renewal of Israeli relations with Moscow, Israeli analysts say. The dry, business-like exchange of signatures, carried out discreetly at the Swiss Foreign Ministry in Berne on Sept. 14, typified the pragmatic, non-political fa,cade projected by both sides during the gradual process of renewed contact between Israel and the Soviet bloc.
The Soviet Union and its allies broke relations with Israel after the 1967 Arab-Israeli war, and any move toward restoring those ties is viewed here as a reflection of Soviet policy. Israeli and Soviet teams met for consular discussions last year in Helsinki, and a Soviet delegation is currently in Israel to handle consular affairs.
Israel and Poland agreed to open interest sections last year, and Israeli Foreign Minister Shimon Peres is slated to meet his Yugoslavian counterpart at the UN next month in a possible prelude to a similar agreement.
These developments have been accompanied by Moscow's release from prison of leading Jewish activists, and a significant rise in emigration permits issued to Soviet Jews. Those moves have been interpreted here as a Soviet effort to improve ties with the United States and increase Moscow's involvement in a Mideast peace process.
Mr. Peres said Sept. 15 that though the Kremlin was moving cautiously, out of consideration for the Arab states, it appeared to be inclined toward gradual normalization of ties with Israel. ``The Soviet Union has not [yet] done enough, but it is a slow process,'' he said.
After the ceremony in Berne, Israel's chief representative said the agreement with Hungary had the potential to develop into full normalization of relations. The two countries already have limited trade ties.