NEWS ANALYSIS : Diplomatic Waltz Heads for Showdown

RABAT, Morocco —  After wringing a conditional agreement to Middle East peace talks from Israeli Prime Minister Yitzhak Shamir last week, Secretary of State James A. Baker III telephoned President Bush, had a quick dinner with aides, eased his back with a Finnish massage--and went straight to work on the next phase of negotiations.

After five months of grueling, long-distance diplomacy--six trips, 28 stops and more than 100,000 miles in the air--Baker is now closer than any American negotiator since Henry A. Kissinger to arranging direct peace talks between Israel and all its Arab neighbors. With both Syria and Israel in agreement on the basic framework for the talks, the mood on Baker’s Air Force 707 is one of growing confidence; for the first time, the prize is in view.

Still, as Baker warned at every stop last week, “There is more work to be done.” The delicate structure of compromises that has brought the American initiative this far could yet collapse under the weight of several major issues on which Israel and the Arabs disagree completely.

Until now, Baker has succeeded by urging his negotiating partners to put aside questions of substance and to compromise on questions of form. But on the remaining procedural question--who should represent the Palestinians at the talks--he may not have that luxury.

Israel’s Shamir is insisting that the makeup of the Palestinian delegation goes to the heart of the most emotional issue of all: Who owns Jerusalem? If any of the Palestinians at the table are Jerusalem residents, Shamir argues, that will imply that Israel’s control of the predominantly Arab eastern half of the holy city, annexed after the 1967 Arab-Israeli War, is open to question.

Not everyone agrees. Former Prime Minister Yitzhak Rabin, for example, argues that the presence of a Jerusalem resident in the talks need not imply anything about the city’s future. “But now that we’ve made an issue of it, we can’t back down--because we’ve made so much of it,” an Israeli Foreign Ministry official said.

Baker apparently hopes to finesse the issue by persuading the Palestinians to accede to Israel’s demand that no Jerusalem Arabs attend the first round of talks. But such a compromise would rest on a paradox, for the solution must allow Israelis to claim that Jerusalem’s future is not negotiable--and Palestinians to claim that it is. And that is precisely the kind of question Baker had hoped to avoid addressing at this stage.

Shamir, by accepting the American plan but adding a proviso that the Palestinian delegation must meet Israel’s conditions, has succeeded in putting the ball in the Palestinians’ court--and enlisting Baker’s help. Now Baker is trying to jawbone the Palestinians into accepting Israel’s terms, or at least into making a counteroffer that he can use as the basis for a compromise.

A Palestinian leader who met with Baker last week in Jerusalem promised him an answer in “not months but days.” Nevertheless, U.S. officials are anticipating a long August of secret negotiations--followed by either a seventh Baker tour through the Middle East or, more likely, a series of visits to Washington by the area’s leaders--before the issue is resolved.

Meanwhile, Baker set off on a three-day tour of North Africa this weekend to enlist more Arab leaders to press the Palestinians to compromise.

Yasser Arafat, chairman of the Palestine Liberation Organization, and other PLO leaders have said they want the Palestinians to be part of any peace conference but have rejected Israel’s demand for restrictions on their delegation.

“We had appreciated President Bush’s initiative from the beginning,” Arafat said in an interview with the Washington Post published Saturday. But he added: “How (can) the American public . . . accept for the occupiers (Israel) to appoint the delegation for the Palestinians? This precedent never happened before.”

Indeed, the Palestinians, as the weakest of all the parties in the Middle East conflict, seem the most desperate of anyone for a place at the negotiating table.

A senior PLO official in Amman, Jordan, even appealed in an interview Saturday for the two superpowers to impose a compromise that would allow the talks to get under way.

“The best way is for the superpowers to take it on themselves,” he said. “If they wait for the Arabs and Israelis to get ready, it will take 20 years.”

He added that time is running out for moderates in the PLO and Arab governments to work toward compromise solutions. “If, in less than a year’s time, the Arabs feel they’ve been deceived, we’ll be in a very bad situation,” he said. “The area is pregnant with fundamentalism and radicalism.”

When Baker began his negotiations in March, he deliberately left the PLO out and began working with Saudi Arabia and other U.S. allies in the Arab world to find new, more moderate figures who could speak for the Palestinians.

Ironically, however, Baker’s negotiations with Palestinians living under Israeli occupation has had the unintended effect of rehabilitating the PLO and making it a kind of arm’s-length partner in the lengthy diplomatic waltz. Most Palestinians still consider Arafat and the PLO as their chosen national leadership, and the moderates with whom Baker has met have made a point of telling him so.

That situation has raised another potential sticking point in the diplomatic process, for Shamir has said he will accept no representatives of the PLO at the negotiating table. Baker has been struggling to find a formula under which the Palestinians can consider themselves linked to the PLO while the Israelis can consider them not linked.

All these problems reaffirm a sadly enduring fact that Baker’s success on procedural issues has obscured: The Arabs and Israelis, despite their newfound willingness to talk, remain far, far apart on basic matters of substance.

At the very core of the issue, the Arabs insist that the purpose of negotiations should be to arrange an Israeli withdrawal from territory occupied in 1967, in exchange for peace; Shamir insists that he will give up no territory at all.

But for now, Baker and other U.S. officials resolutely duck all such questions of substance.

Their hope is that once negotiations are started, the very fact of direct talks will help soften the conflicts of two generations.