AS a matter of principle, the Palestine Liberation Organization still asserts its right to name and consult with any Palestinian delegation to the regional peace conference set for this month. In practice, however, the PLO has acceded to a process wherein its participation - which Israel has steadfastly rejected - will be all but invisible.This is simple pragmatism. The Palestinians can't afford to be seen as thwarting the US-led peace effort. Their circumstances are desperate. The intifadah is losing steam; violence directed at fellow Palestinians suspected of collaboration with Israel, however, is increasing. The PLO's tilt toward Iraq during the Gulf crisis diplomatically isolated the Palestinians. Thousands face economic disaster as a result of the turmoil caused by that crisis. The Palestine National Council, meeting in Algiers last week, had little choice but to endorse participation in a conference engineered by US Secretary of State James Baker. To most members of the Palestinian parliament in exile, the US initiative represented a last best chance to salvage at least a portion of their hopes for eventual self rule. What comes next, supposedly, is the naming of a joint Palestinian-Jordanian delegation to the talks. The Palestinians named will, for outward purposes, probably conform to the demands of the Israeli government: no residents of Jerusalem, no avowed members of the PLO, no Palestinians from outside the territories. This doesn't mean the PLO will have no influence over the delegates. Yasser Arafat's organization remains the central political force among Palestinians; its views will be reflected. Israel's leaders know this, but have apparently decided they can live with it, so long as the formal demands are met. Israel, too, doesn't want to be seen as blocking the conference. So the prospect of actually holding the talks is brightening. But even if a opening session takes place this month, it will represent only the first tentative step toward real peace. The issues are extraordinarily difficult, as hinted by the Palestinians' insistence that they'll only join in if "land-for-peace" is on the table. That phrase has opposite meanings for Palestinian leaders and Israeli Prime Minister Yitzhak Shamir. What kind of a compromise on territory can ultimately be made? What should self-government for the Palestinians of the West Bank and Gaza mean? Who will control the "state-owned" land where Israeli settlements have been built? More immediately, can the US work out with Israel a halt to settlement building? Those questions inevitably lie ahead. For now, the imperative is that the talks at least begin.