COMBINING diplomatic finesse, old fashioned fudging, and discreet pressure, the organizers of the Middle East peace conference have decided on the shape of the table, but with the talks about to open on Oct. 30 they were still working on ways of keeping people sitting at it.Issues of protocol and appearance have dogged preparations for the historic meeting right until the end. Impressions have become all important, and substance has been set aside. Typical of the last-minute haggling was an Israeli protest at Washington's decision to allow the Palestinians as much speaking time as other delegations. Israeli officials insisted that because the Palestinians are attending in a joint delegation with the Jordanians, they should share Jordan's allotted 45 minutes. Any other arrangement, the officials argued, would give the impression that the Palestinians were a separate entity, which could set a precedent for the creation one day of a separate Palestinian entity on the ground, an outcome that Israel is determined to prevent. Though the United States overruled this protest, it has agreed to another sidestep on protocol. The delegations at the conference table will not sit behind their customary national flags, to avoid the appearance of a Palestinian flag, which was unacceptable to the Israeli team. At this stage, impressions and the possible implications of those impressions are at the heart of every decision. They are still bedeviling the question of where bilateral negotiations between Israel and each of its enemies will begin the week of Nov. 4. The Arab countries - which have always pressed for a full international conference on the Middle East - are anxious that the bilaterals should be held in Madrid. That would reinforce the idea that they would be taking place under the umbrella of the opening conference. The Israelis, however, who have always demanded direct talks with their neighbors, see the Madrid conference as merely a launching session. To emphasize that interpretation, they want the bilateral negotiations anywhere but Madrid, preferably in the Middle East. Pending a suitable compromise on that issue, with the least possible loss of face for all parties, the conference was due to open in the baroque Royal Palace here with a speech by the host, Spanish Prime Minister Felipe Gonzalez Marquez, followed by speeches from US President Bush and Soviet President Mikhail Gorbachev, cosponsors of the meeting. Sharing status as "participants," which includes the right to speak, are Egypt and the European Community, both of whom will address the conference on the afternoon of Oct. 30. Only on Oct. 31 will the delegations considered "parties" speak - Israel, Syria, the Jordanian-Palestinian team, and Lebanon. Listening to them in the conference room, but without the right to participate, will be three "observer" delegations, from the United Nations, the six member Gulf Cooperation Council (GCC) and the five member North African Mahgreb Arab Union. After a second round of speeches on Nov. 1, the conference is due to adjourn before the start of the Jewish sabbath that evening. Then it will face the uncertainties surrounding the bilateral talks. Equally uncertain is the status of the planned third stage of the negotiations, originally due to begin within two weeks. The countries at the conference are to gather for talks on regional issues such as water use, arms control, and the environment. Syria's refusal to join such talks until it sees "progress" in resolving its dispute with Israel over the Golan Heights has thrown this multilateral phase of the process into doubt. Meanwhile "Operation Pax," the unprecedented Spanish police deployment to ensure security is in full swing, with armored cars outside the conference site, 19,000 policemen patrolling the capital, and metal detectors installed at the entrances to all the luxury hotels where the delegations are staying. In a cavernous glass walled hangar, part of Madrid's international fairground, banks of telephones, typewriters, and fax machines have been set up for the 4,600 journalists accredited to cover the conference, along with makeshift television and radio studios and simultaneous translation facilities.