WITH the composition of a Palestinian delegation the last great hurdle to a Middle East peace conference, United States Secretary of State James Baker III wrapped up his sixth swing through the region in North Africa, where he hoped to convince the Palestinians' closest Arab allies to embrace the US-sponsored peace process.Mr. Baker's intention, according to US officials, was to impress upon Arabs whom the Palestinians trust that a conference represents an opportunity for them - one that is not likely to come along again soon. Publicly, both US officials and their North-African counterparts insisted the discussions, which ended yesterday in Algiers, were not conceived as go-between sessions either to reach or represent the Palestine Liberation Organization. But as downtrodden and isolated as the PLO may be following the Gulf war, the organization still represents most Palestinians and so must agree to any Palestinian delegation. Israel has said it would reject any Palestinian representative with links to the PLO, or who lives in East Jerusalem. One oft-discussed compromise is to include Palestinians from Jordan. "We cannot exclude our brothers and sisters in Jerusalem from being represented," said Bassam Abu Sharif, adviser to PLO leader Yasser Arafat. "No one has the right to exclude them." Following talks with Palestinians in Jerusalem Friday that Baker considered encouraging, indications from PLO officials over the weekend were conciliatory, but remained ambiguous. On Saturday, Mr. Arafat called on all parties to "make peace like brave men." Speaking on French television from Tunis, Arafat nevertheless refused Israeli diktats on a Palestinian delegation, and said Washington should "ask us directly" about concessions on a delegation makeup. AT no point in the three-country Maghreb visit did Baker meet any representatives of the PLO, headquartered in Tunis. But if US officials chose to add North Africa to Baker's Middle East itinerary, it is because Israel's acceptance last week of a peace conference conditional on the makeup of the Palestinian delegation made discussions with PLO interlocutors suddenly urgent. And that meant talks with the North Africans. Baker's reception in a region he had never visited before ranged from cautious to enthusiastic. It was enthusiastic in Tunisia, for example, where officials are eager to erase what they consider the misunderstanding over their country's middle-of-the-road position during the Gulf crisis; but more cautious in Algeria, where officials and the press bridle at what they call the unequal application of international law in the case of Israel and the occupied territories. "Suspicions and prudence are two words that characterize how Secretary Baker is being received here," says Abderrezak Merad, editor-in-chief of El Watan, an Algiers daily newspaper. "There is some fear that the visit represents a forcing by the United States ... to weaken the Maghreb's support for the Palestinians." In Rabat, Morocco, Saturday, Baker extended an invitation to King Hassan II to attend the conference as an observer. Hassan was invited in part because Morocco holds the six-month presidency of the Arab Maghreb Union, and Baker said the US wants the Maghreb associated with the conference. But Hassan's participation is a wise step on other counts: As the descendant of the Islamic prophet and president of the Arab League's committee on Jerusalem, Hassan's participation could negate the influence of radical Islamic leaders condemning the conference. In both Rabat and Tunis, officials hope to reap the benefits of any cooperation with the US on the conference issue. The Tunisian government would like to see a restoration of aid cut following the Gulf war. And Rabat, focused on plans for an internationally supervised referendum on the Western Sahara early next year, wants US support as the referendum process heats up in coming months.