US Tries to Break Mideast Logjam. Tunis meeting comes against backdrop of new `listening' by Palestinian, Israeli groups. FOREIGN RELATIONS: US-PLO CONTACTS

ISRAELIS and Palestinians are talking peace. The challenge is to move them from think-tank salons to official negotiating tables. ``A lot of history has happened in the last hundred days'' says a top Bush administration official. ``The kinds of contact in recent weeks between Israeli Knesset members and PLO officials would have been unthinkable six months ago.''

Indeed, a senior US official says last December's decisions by the Palestine Liberation Organization (PLO) have changed the parameters of the Arab-Israeli dispute and introduced fluidity that is accelerating chances for peace.

In this context, the United States ambassador to Tunisia and representatives of the PLO are slated to sit down to day to talk about the prospects.

``The focus in Tunis will be on the peace process,'' says a second senior official. ``We're trying to get the Palestinians to hold out a hand to Israel.'' President Bush and others asked Israeli Foreign Minister Moshe Arens to do the same for the Palestinians last week during his Washington visit.

As in the US-Israeli talks, there will be no US plan or specific recommendations in this first wide-ranging meeting with the PLO since President Bush came to office, officials say. But the US will share general ideas on ways to build confidence between the Palestinians and Israelis and urge the PLO to come up with its own concepts for creating the trust needed toward negotiations.

Perhaps more important than today's meeting, however, is the burgeoning dialogue between Palestinians and Israelis in various international meetings and the PLO campaign to prove its willingness to live with Israel.

``The change in the public dialogue has been amazing,'' the second senior official says. ``To a certain extent, we just want to keep it going, to protect it'' to see what fruit it will yield.

Last week, Israeli peace activists and Palestinian moderates debated in New York and Washington and PLO spokesmen paraded their peace line in both cities. ``What's so interesting is not so much what is being said - the ideas have been around for a while - but who is listening,'' says a well-informed West European diplomat. ``I've never seen such a free exchange between Israeli journalists and a PLO official,'' said another diplomat after a meeting at Washington's Brookings Institution last week.

``The Palestinians are trying to create new channels of communication to Israel with full force,'' Palestinian leader Nabil Shaath told the breakfast gathering. ``This has created real opportunities for me to learn about the Jewish psyche, wounds, and fears,'' he said.

With articulate Palestinians like Mr. Shaath talking about a future relationship between Israel and a Palestinian state similar to the cooperation between Belgium and Luxembourg, Israel's Likud-led government is coming out the loser in this round of the public relations battle.

``To have Palestinian and Israeli doves talking peace, while a hawk like Foreign Minister Arens refuses dialogue with the PLO in Washington is devastating,'' the European diplomat says.

Another specialist on the Middle East says one can only question Arens's judgment when he accuses the PLO of carrying ``the responsibility for some of the worst atrocities the world has seen since World War II.''

Arens did offer a three-track approach to negotiations which focused on getting Jordan, ``truly representative'' Palestinian interlocutors ``in Judea, Samaria, and Gaza,'' and ``another Arab country presently in a state of war with Israel'' to the negotiating table. He asked for US help.

But nobody was biting. In his official meetings, US officials told Arens that while support for Israel remains firm, the administration hopes Prime Minister Yitzhak Shamir will bring concrete ideas on reducing tensions in the territories and realistic thoughts on the final status when he comes to Washington April 6.

``The choice in the territories is not between PLO and non-PLO,'' says a well-placed administration specialist. ``That option disappeared when [Jordan's] King Hussein's people were swept away by the intifadah [uprising].''

The choice now, the specialist says, is between direct talks with the PLO in Tunis and indirect negotiations with people in the territories who are linked to the PLO. Since Mr. Shamir vehemently opposes any direct talks with the PLO leadership, he says, the most viable option for talks is with PLO-connected figures in the West Bank and Gaza. Of course, he adds, this means the PLO will also have to yield on its insistence for direct talks with Israel as a first step in the process. [Top military intelligence officials told the Israeli Cabinet that Israel must deal with the PLO if it wants to reach a settlement with Palestinians and end the uprising in the occupied territories, the Associated Press reported Monday.

The New York Times and Washington Post reported Tuesday that an internal intelligence agency report given to the Israeli cabinet last week concluded that the Palestinian uprising cannot be ended in the near future and that the government will not find a political solution unless it agrees to talk with the PLO.

The Post reported also that Shamir tried to block release of the military report, while also commissioning another report from another intelligence agency.]

In Tunis today, the Palestinians are expected to argue for direct talks with Israel. PLO spokesmen are no longer insisting on holding an international peace conference as a first step. They are promoting ``climate-building measures'' and direct talks before the conference, says Mr. Shaath, chairman of the Political committee of the Palestine National Council, which serves as the PLO's legislature. But the PLO still wants to designate the representatives for any dialogue.

The PLO officials are also expected to argue that the final status of the West Bank and Gaza has to be addressed at least in principle before there can be any scaling back of the intifadah or interim solutions.

``We've got to define where we are heading,'' Shaath says, ``in order to be credible when asking for the interim steps.'' He says the intifadah provides the main leverage on Israel. ``If the intifadah stops, we'll be irrelevant again.''

The US will resist the notion of discussing end results now, officials say. The key, they say, is to begin reducing tensions on the ground and to start a dialogue between Israelis and Palestinians. ``The PLO has lots of interesting ideas these days,'' says a well-informed US official. ``But they all still begin with the precondition of a PLO state and that is the big block in our mind.''

Cross-border incursions by Palestinians into Israel will also come up. As these operations continue, the US worries that an incident could blow up and endanger the whole dialogue. PLO chairman Yasser Arafat has proposed a cease-fire in southern Lebanon to limit the danger and as a confidence-building step.

US officials say the idea is good in principle, but they doubt Arafat could control the situation if a cease-fire were negotiated, and they suspect he will demand too many concessions from Israel to make an accord workable.

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