YASSER ARAFAT, chairman of the Palestine Liberation Organization, conferred with Egyptian leaders here Monday in his first visit to Cairo in more than a year.Mr. Arafat, whose relations with Egypt fell to an all-time low during the Gulf war, met with Egyptian President Hosni Mubarak amid final preparations for the Middle East peace conference in Madrid, scheduled to open Oct. 30. Arafat has been seeking a pre-conference meeting of Arab heads of state, but told reporters in Cairo that Arab foreign ministers and the PLO would meet soon, Reuters said. A day earlier, in Jordan, the PLO chairman said he wanted an Arab summit meeting before the opening of the peace talks, and Syria has said it would host such a gathering in Damascus. According to Arafat, the summit would see leaders of the "front-line" Arab countries - Egypt, Syria, Jordan, and Lebanon - agree to a common front before attending the peace conference. At the time the PLO chairman said he was carrying a message to Jordan's King Hussein from Syrian President Hafez al-Assad "concerning the Arab summit and Arab coordination." Arafat met with the Syrian leader in Damascus Saturday. Syria, Lebanon, the PLO, and Jordan all indicated their support for a summit. But Egypt also made it clear that it opposed wider Arab talks before the Madrid meetings. On Sunday, even before Arafat's arrival here, senior officials ruled out prospects for an Arab summit. Said one official: "We do not feel it is necessary. There are no fundamental differences between Arab countries on what the final issues are." According to the official, the original call for an Arab summit came not from the PLO but from Syria. "Assad has a domestic constituency," he said. "They've been educating Syrians to look at Israel in an adversarial role for so long, and for him to agree to bilateral talks is a terrific shift. "He needs to show his people that all the Arabs agree to these talks," he added. Yesterday there were signs that a compromise was being discussed - a meeting of foreign ministers rather than heads of state. Egypt's state-run news service, the Middle East News Agency, said Arab foreign ministers would meet in Damascus tomorrow to coordinate their peace conference positions. From the PLO's headquarters in Tunis, Abdul-Rahim Mallouh told another Western news agency the same day that the PLO and foreign ministers of the four Arab states would gather for a meeting this week. Mr. Mallouh, a member of the PLO ruling executive committee, did not elaborate on the agenda for the talks other than to say it would focus on issues related to the peace conference. A second, unnamed, PLO source told the news agency that the organization was "seeking an Arab commitment not to sign separate peace treaties with Israel before a just and comprehensive solution to the Palestinian problem is reached." Arafat's visit to Egypt coincides with the arrival of Soviet Foreign Minister Boris Pankin. But contrary to earlier predictions, the PLO chairman was not scheduled to meet with Mr. Pankin here. PLO official Nabil Shaath said Arafat would meet the Soviet minister in Paris sometime before the opening of the peace conference. After meeting with Egyptian Foreign Minister Amr Moussa late Sunday, Mr. Shaath said: "The French government has made all the preparations for the meeting and we don't want to change it." Repeated requests by Arafat to visit Cairo have been rejected by the Egyptian government since August of last year, following his attendance at the Cairo-hosted Arab summit which condemned Iraq's invasion of Kuwait. At that summit Arafat defended the Iraqi action and opposed calls for Arab military support to end the occupation of Kuwait. In the months which followed, Arafat aligned himself still closer to Iraqi President Saddam Hussein, earning the enmity of many former Arab allies.