Mideast Transition

THE agreements between Israel and the Palestine Liberation Organization (PLO) did more than profoundly affect their speck of land between the Jordan River and the Mediterranean Sea. They also raised the curtain on a broader horizon.

Israel would cease to be a tiny, embattled beachhead on the Arabian shore, sealed off by hatred and suspicion from the vast Islamic hinterland. Instead, with Palestinian partnership, it could be the point of entry for the 21st century - sweeping away trade boycotts and obsession with armed security. Israel's production and marketing skills could make it the Switzerland of the area, benefiting all.

Yesterday's dream is now a prospect in the early stages of exploration in the second track of the peace process.

The Madrid Conference of 1991 aimed for a ``comprehensive peace settlement through negotiations along two tracks'' between Israel and the Arab states as well as between Israel and the Palestinians. The United States and Russia, as Madrid cosponsors, opened the second track a few months after the first, in the form of multilateral working groups on regional issues. All states in the Middle East, except Iraq and Iran, were invited. Syria and Lebanon have chosen to stay away. The groups have dealt with five peace issues: arms control and regional security, water resources, environment, economic development, and refugees.

The multilateral meetings are informal with no written record. The object is not to negotiate agreements but to stimulate discussion. Participants - between 20 and 40 - sit around a table as equals. The European Community is a major player, as is Japan. Both expected to provide not only expertise but economic help; they have now done so. The World Bank is very important, not as much as an immediate source of funds as for its analysis. A new study finds that the occupied territories will need $3 billion over the next eight years for such basic needs as water and health care.

EVERYONE is keenly aware that there will not be any regional development if Palestinians fail. Large sums of money are the magic ingredient; they are not easily come by. Certainly the US will not provide them. But President Clinton has approached the Arab states of the Gulf and obtained the promise of support from King Fahd of Saudi Arabia. That would be more than money. It would also be an act of reconciliation after Arafat's and the Palestinian's incredible approval of Iraq's aggression in the Gulf war. It would be a call for Arab cooperation in the regional efforts that lie ahead.

Even before the breakthrough Sept. 13, it was agreed that the working group on refugees would meet this fall in Tunis; the environment group will meet in Egypt. An inclination to have more meetings in Arab countries would be strengthened by progress in Israel-Palestinian relations. Feasibility studies are many. Subject matter is intertwined. Autonomous Gaza needs an airport and a deep seaport - now possible, since the Nile no longer silts up the Levantine coast.

The multilateral talks are brief, held twice a year. But the numerous participants remain active between sessions. This year, armscontrol seminars have brought Arab and Israeli officials together in Egypt on arms verification, naval coordination in Canada, and crisis communication in Turkey and in the Netherlands.

The sensitive issue of refugees will not be negotiated until the final phase of the Israeli-Palestinian bilaterals. But the group is not waiting to set up an objective data base for those who must grapple with the problem and those who will be asked to help.

Nearly 6 million Palestinians are scattered through the region and beyond; 2.6 million are refugees; 900,000 live in camps. In part of the world where statistics tend to be state secrets or propaganda, accurate figures are essential and none more than on water. With populations growing rapidly and countries already pumping more than nature replenishes, the states of the area must begin to plan regional water management and conservation to fend off the worst case.

Indispensable to the new era and safe to go where they please, goods and ideas must move freely. Otherwise, there will be little investment.

Normality is the word. Its attraction is so great after decades of stifling constraint that it seems inconceivable for leaders and their people to turn back to the old - as long as they see real chance of success. The Opinion/Essay Page welcomes manuscripts. Authors of articles we accept will be notified by telephone. Authors of articles not accepted will be notified by postcard. Send manuscripts by mail to Opinions/Essays, One Norway Street, Boston, MA 02115, by fax to 617 -450-2317, or by Internet E-mail to OPED@RACHELCSPS.COM.

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