AFTER receiving rave reviews for their performance in Madrid, Palestinian negotiators at the second round of Middle East peace talks in Washington are finding the going more difficult.Some analysts say they have lost the public relations advantage they gained in Madrid, where the peace process was launched last month. Diplomatic observers were surprised and impressed when the Palestinians proved conciliatory and pragmatic during opening ceremonies in Madrid. The performance generated hope that when formal negotiations with Israel began in Washington they would quickly get down to business. But during a week of wrangling over procedure, in which they insisted on talking to Israel independent of their Jordanian negotiating partners, the Palestinians appear to have staked out a harder line. Sources close to the delegation are especially dismayed because of the lost opportunity for a public relations victory offered by Israel's decision to boycott the originally scheduled date for the opening of the Washington talks. "All the pluses they gained when the Israelis didn't show up on the fourth of December, the Palestinians lost when they got nit-picky," says one source close to the Palestinian delegation. "They should have said, 'We're here to talk.' They have no clue about the media and the message." Palestinian delegates say this procedural issue is crucial to the outcome of negotiations to provide greater autonomy for Palestinians living in the Israeli-occupied West Bank and Gaza Strip. A week of procedural bickering was triggered by conflicting interpretations of US-brokered ground rules for the peace talks, which call for a joint Palestinian-Jordanian delegation to treat with Israel, but also refer to "two-track" negotiations "between Israel and the Arab states, and between Israel and the Palestinians." Israel says it is willing to talk to the Palestinians separately but insists on the umbrella of the joint delegation. Because a separate Palestinian delegation could set the stage for an eventual Palestinian state, Israeli sources say Palestinians have reneged on an agreement in Madrid to negotiate over interim autonomy without reference to the final status of the territories. The Palestinians insist on being a separate negotiating entity because they want to be the only Arab party responsible for concluding the autonomy agreement with Israel and because their aim is an independent state in the territories. "Although the joint delegation is the address, we think the point of departure for direct talks must be the two-track," says Sari Nusseibeh, a West Bank university professor who is an adviser to the Palestinian delegation. "The point of ultimate reference has to be the Palestinian side. We have to be the party to make the final agreement with Israel." "It's not a procedural issue, it's the ultimate in substance," says another source close to the Palestinian delegation. Right or wrong, the harder-line position has tarnished the pragmatic image Palestinians cultivated in Madrid and has invited media criticism that they have badly overreached. One reason may be the absence in Washington of Faisal Husseini, the leading Palestinian figure in the West Bank, and the increased influence of Palestinians who live outside the occupied territories and who are clo se to the Palestine Liberation Organization (PLO). Mr. Husseini, who was an adviser to the Palestinian delegation in Madrid, reportedly opted to stay home to shore up faltering grass-roots support for the peace process. Persistent doubt at home that the peace process will produce Israeli concessions may, itself, be another factor behind the more rigid Palestinian posture in Washington. "They feel their domestic constituency is weakening," says an informed Israeli source. The absence of Husseini and the new mix of Palestinian personalities in Washington may also help to explain why the Palestinians have had greater difficulty projecting unity or explaining their position to the media effectively, analysts say. After refusing to issue visas to any PLO advisers, the US granted waivers to two Palestinians who live outside the territories, including Akram Haneya. Mr. Haneya is a close adviser to PLO leader Yassir Arafat and an influencial member of the newly created "Higher Committee" of delegates and advisers that directs the Palestinian delegation. Although Haneya's profile has been low, "his presence keeps the touch of the PLO on the proceedings," notes a London-based Lebanese journalist. Although the US is not currently talking to the PLO, it has always agreed that "diaspora" Palestinians like Haneya have a right to be involved in the peace process. The waivers for Haneya and Taysir Arouri, another deportee from the West Bank, also reflect a US conviction that an indirect PLO role is needed to legitimize the participation of non-PLO Palestinians from the occupied territories, analysts say. "Everyone, including Israel and the US, knows there's no process without the PLO," says James Zogby, executive director of the Arab American Institute. "So, creative ways were found to get around the problem so as not to disrupt the process." Israeli and Palestinian negotiators are expected to resolve their procedural differences when talks resume today. Israel is also holding separate talks with delegations from Syria and Lebanon. Multilateral talks on regional issues are due to begin early next year.