Next Step : Keeping Score at the Mideast Talks : * Occupied land. Jewish settlements. The PLO. On the eve of negotiations to sort out such sticky issues, here are some clues for gauging the progress.

MADRID —  When the long-awaited Middle East peace conference begins here Wednesday, it will resemble the scene at the biblical Tower of Babel. There will be very little communication and even less understanding between Israel and its Arab antagonists.

The American organizers intend to give all the delegations an ample opportunity to say whatever they want during their speeches at the formal opening. That seems a sure way to produce a procession of bitter and angry addresses, each more inflammatory than the previous one.

So how can the waiting world tell whether the talks are making real progress or whether the participants are merely settling in for a continuation of the stalemate that has marked Middle East diplomacy for decades?

There are a few clues that may be helpful. But the short answer is that it probably can’t--at least not with much certainty.

Perhaps the most important gauge is the start of the vital second phase of the conference--face-to-face negotiations between Israel and each of its closest neighbors--Syria, Lebanon and a joint Jordanian-Palestinian delegation. Conference organizers want these talks to start on the fourth day, right after the marathon of set-piece speeches has ended. But officials acknowledge that the negotiations may not start on time and, even if they do, they may break down immediately.

If the bilateral talks run even a few days, that should be a good omen for the cause of peace. The converse may not be true. Even if the talks break down in Madrid, they could be resumed elsewhere.

Another sure way to tell if progress is possible is to listen for the letters P-L-O. If no one says them, things are going well.

Israel has threatened to walk out of the conference if the Palestine Liberation Organization plays a prominent role. So, if the Palestinian delegates want to wreck the conference they can publicly announce their allegiance to the PLO. If the Israeli government wants to pull out of the talks, it can assert that the Palestinian delegation is PLO-dominated. If both sides choose to overlook the PLO, it is an indication that they want the talks to continue.

Other possible indicators include the extent and level of U.S. and Soviet participation, the number of insults--both intended and accidental--that are exchanged during the formal conference, and the level of participation by Arab states, such as Saudi Arabia, that do not share a border with Israel.

“Probably there will be a slow start,” said William B. Quandt, a former National Security Council expert on the Middle East. “The bilateral talks almost certainly will deadlock very quickly. It is not clear that there is procedure for breaking the deadlocks.

“But other tracks may open up,” Quandt suggested. “Between Syria and Israel, if things get serious we won’t see the negotiations. It will be Syrian intelligence officials and Mossad (Israeli intelligence) types meeting somewhere in Europe to decide what can be done.”

Secretary of State James A. Baker III, the driving force behind the conference, envisions a three-stage meeting: formal speeches, followed by face-to-face bilateral negotiations on the core issues of peace and territory, followed by wide-ranging regional talks on subjects such as water resources and economic development.

Syria has already said that it will boycott the third phase and will urge other Arab states to do the same unless it receives a clear indication that Israel is ready to return the Golan Heights, which it occupied in 1967. If Syria stays away from the regional talks, Lebanon, which is under very strong Syrian influence, is almost certain to join the boycott.

This makes the third-phase of talks an interesting barometer of the atmosphere of the peace process. If the meeting starts on schedule, two weeks after the formal beginning of the conference, and is attended by Israel, Egypt, Jordan, Morocco, Saudi Arabia, the other Gulf states and the Palestinians, it would indicate that the peace process is on track toward modest success. If either Syria or Lebanon attends, that would portend a major breakthrough. If the third phase is postponed or if most of the Arabs stay away, it would be bad news for the peace process.

But the key work of the conference will be done in the bilateral meetings between Israel and its neighbors. Conference organizers hope to get that phase started in Madrid, but it is up to the parties to decide where and when they choose to meet. This means that at least some of the bilateral talks could degenerate into procedural bickering over time and place without ever getting to the substantive issues--a bad sign.

“The key to everything is to get the bilateral talks going,” said Col. Andrew Duncan, an analyst at the International Institute for Strategic Studies in London. “This could pose a problem if they can’t agree where to meet face-to-face individually.”

Even if the bilateral meetings start on time, no one expects the first round to run very long. A total breakdown would be easy to evaluate, but it may be more difficult to assess the significance of a few days of procedural talks followed by a long recess. This could indicate that the parties are serious and eventually will reach agreement or it could show that they are just going through the motions.

“If it doesn’t break apart right away I think it will be (protracted) like the START negotiations,” said Jean-Pierre Langellier, foreign editor of the Paris newspaper Le Monde. “There will be breaks in talks. Time out for elections in Israel, for example. The conference will be like a dormant structure that can be reawakened when it is needed. Shamir told one of our reporters that he could not accept the idea of giving up territories but that others who follow him might. I think that might be what happens. For Shamir, it is a matter of conviction not to give up territory, but for others who knows?”

The most delicate issue, by far, is the PLO.

“They say PLO and we say bye-bye, my friend,” said Yossi Olmert, Israeli government spokesman.

The key word in Olmert’s comment is “say.” Everyone knows that the Palestinian delegates are closely aligned with the PLO. But as long as no one says that out loud, the conference can continue.

“There is a fiction that the PLO has nothing to do with the conference,” said Robert Hunter, a former U.S. National Security Council expert on the Middle East. “That fiction is very thin. The question is whether it becomes so thin that it’s transparency can’t be ignored.”

The fiction works both ways. For the PLO, the fictitious claim is that the organization is more firmly in control of the Palestinian delegation than it really is.

The Palestinian delegates were undeniably named by the PLO. But the selection process followed Israeli-imposed guidelines that excluded many people the organization would have preferred to include such as acknowledged members of the PLO, residents of Jerusalem and Palestinians living outside the West Bank and Gaza Strip.

So far, Israel has chosen to consider the Palestinian delegation to be free of PLO taint.

As long as both sides respect the fiction, progress will be possible; as soon as either side insists on telling the truth, the conference will be in trouble.

As official co-chairmen of the conference, the United States and the Soviet Union have the responsibility of trying to break deadlocks and of keeping the process going. But officials in Washington and Moscow are being very coy about describing what they plan to do.

“The United States and the Soviet Union will serve as the driving force for the process,” a senior Administration official said. “We will be available to push the parties toward accommodation, to try to bridge gaps in the role of honest broker.”

The rank of the U.S. or Soviet mediator and the length of time they stick with the job will tell a lot about the relative success or failure of the negotiations. If Baker stays in Madrid after the formal talks end, it will be a sure sign that the secretary of state thinks that progress is possible. The longer Baker stays, the better things are going.

But no one expects Baker to stay indefinitely. State Department spokesman Richard Boucher said the Administration will eventually appoint a special envoy to ride herd on the talks, although no one has been selected. The appointment of a prominent and respected envoy probably would be taken as an indication that the talks are making progress.

U.S. officials do not expect Moscow to play a very important role, no matter how the talks progress. Soviet influence in the Middle East has declined so much that there really isn’t much the Soviets can do.

“Moscow’s ability to manipulate the levers of power has been dramatically weakened,” a U.S. official said. “It seems perfectly clear that most of the nations of the Middle East are really concerned about pleasing Washington. Pleasing Moscow is secondary at best.”

For this reason, the intense level of Soviet participation in the talks probably has more to do with Soviet politics than with the Middle East.

A U.S. official said Soviet President Mikhail S. Gorbachev “probably has concluded that his staying power can be enhanced if he can insinuate himself into global events. He is playing the foreign policy card as a domestic political instrument. His cards are dwindling fast. He had more of them eight months ago. But from his perspective, this is the only game in town.”

Of all the gauges of progress in the Middle East, perhaps the least accurate is what happens during the formal opening of the conference. What is said and done during the first two or three days in Madrid may affect the atmosphere of the talks, but it will have very little impact on substantive issues.

Of course, overt insults still could have an impact. Syrian Foreign Minister Farouk Shareh has already said he will refuse to shake the “guilty” hand of Israeli officials. That sort of thing could become corrosive.

Moreover, U.S. officials expect that the opening speeches will be strident reiterations of already well-known positions.

Rosemary Hollis, a Middle East expert with the Royal United Services Institute for Defense Studies in London, said the preliminary statements might give a clue about how willing the sides are to negotiate an agreement.

“The language could be important to determine whether there is the possibility for negotiating a compromise or whether the delegates are there (simply) to please the United States, make an unyielding statement and go home,” she said. “Everyone has heard the tough positions articulated before so they may not be too offended by harsh language. Still, the key sign will be to note whether there appears to be any desire to continue past the ceremonial plenary sessions into the bilaterals, where the real negotiations will take place.”

Times staff writers Daniel Williams in Jerusalem, Kim Murphy in Cairo, William Tuohy in London and Rone Tempest in Paris contributed to this report.

Who Will Be There

The opening of talks in Madrid will be attended by Israel, Egypt, Syria, a Jordanian-Palestinian delegation and Lebanon. Observers from the European Community and the United Nations will be on hand, and Algeria, Tunisia, Morocco, Mauritania will either send individual observers or a collective representative. These are expected to be key players:

* Yitzhak Shamir, Israeli prime minister, has balked at U.S. efforts to get Israel to give up war-won Arab land in return for peace. He pushed aside his more dovish Foreign Minister David Levy to take charge of the Israeli delegation. * James A. Baker III, U.S. secretary of state, who pressed for the talks. If Baker stays in Madrid after the formal talks end, it will be a sure sign that he thinks that progress is possible. The longer he stays, the better things are going. * Hafez Assad, Syrian president, whose declared ambition for 20 year was to achieve “strategic parity” with Israel and regain the Golan Heights. Syria has said it will boycott the third phase of the talks until it regains the Golan Heights. * Haidar Abdel-Shafi, head of the Jordanian-Palestinian team. Physician, chief of the Red Crescent Society (equivalent of the Red Cross) and a PLO founder from the occupied Gaza Strip. Headed Palestinian Parliament there during Egyptian rule. * Elias Freij, of the Jordanian-Palestinian team, has been the mayor of the West Bank town of Bethlehem since 1972, and has long dealt with the Israelis. He is described as a moderate among Palestinians, with close ties to Jordan. * Faisal Husseini, head of an advisory committee for the Jordanian-Palestinian team, is the leading supporter of PLO leader Yasser Arafat’s mainstream Fatah faction in the occupied territories. He is a moderate.

Who Wants What From the Peace Talks THE GOALS

Here’s a look at the major goals of each of the major participants in this week’s Middle East peace conference in Madrid:

ISRAEL: The Israelis want a formal peace agreement and diplomatic relations with all their Arab neighbors. But, at least in their opening position, they oppose relinquishing any of the territory they have occupied since the 1967 Six-Day War. Israel also wants normal commercial and cultural relations with the Arab states.

The Israelis have high hopes for the “third phase” regional conference over subjects such as water resources, economic development and arms control. This phase is supposed to begin two weeks after the start of the conference. However, Syria has already said it will boycott the third phase until it gets the Golan Heights back, which isn’t likely. Syria is urging other Arabs to boycott as well, but U.S. officials believe they have avoided any defections, at least so far. In addition to the main parties--Israel, Syria, Jordan, Palestinians, Egypt and Lebanon--the countries of the Saudi-led Gulf Cooperation Council and the Magreb countries (Algeria, Morocco and Tunisia) are expected to be in the third phase.

In the background of everything is the status of Jerusalem. The Israelis insist they will not even talk about the status of the Arab neighborhoods of Jerusalem that were captured in 1967 and annexed immediately after. Israel has held all of Jerusalem since after the 1967 war and is determined to keep it. However, the Palestinians covet East Jerusalem as the capital of their proposed Palestinian state. Muslims--especially the Saudis--would like to see additional Muslim control over the Dome of the Rock and Al Aqsa mosques, regarded together as the third holiest site in Islam.

EGYPT: Egypt will participate, but the Egyptians and the Israelis already have a peace treaty and diplomatic relations.

JORDAN: The Jordanians would just like to see everything settled in a way that would not threaten the Hashemite throne. Jordan no longer has a territorial claim against Israel since King Hussein renounced claims in 1988 to the West Bank in favor of supporting a Palestinian state there. The Israelis want a peace treaty and diplomatic relations with Jordan.

LEBANON: The Lebanese want Israel to withdraw its troops from southern Lebanon. The Israelis say they are necessary for their own defense but have indicated that they would consider a complete withdrawal if Syria withdraws all its troops from Lebanon--which at this point seems unlikely. The Lebanese are really not free agents in this because their government is under the influence--some might say control--of Syria.

THE PALESTINIANS: The Palestinians want a state of their own in the West Bank and Gaza Strip. The Israelis want to keep the territory but would like to see an end to the Arab uprising, or intifada. Israel has been willing since the Camp David conference in 1978 to grant the Palestinians limited self-rule. Both the Israelis and the Palestinians have agreed to begin negotiating on the basis of the Camp David accords. That calls for “best effort” bargaining to begin self-rule within one year followed by negotiations over the “final status” of the territories within three years after the start of self-rule. The Palestinians want the final status to be a state. The Israelis want it to be permanent Israeli control with Israel handling defense, foreign policy and many police functions while the Palestinians would have self-government on most municipal services, including some police functions.

SYRIA: The Syrians want to regain the Golan Heights, which Israel occupied in 1967, but they are not--so far--prepared to offer much in exchange, except for a nonbelligerency pact. The Israelis want a peace treaty and diplomatic relations but don’t want to surrender the territory. A senior Bush Administration official says the opening positions are “peace for peace” for the Israelis and “territory for nonbelligerency” for the Arabs. The United States wants a bargain--in effect, “territory for peace.” The Syrians have indicated that they are not interested in much at the conference beyond reclaiming the Golan Heights.

THE PROCESS

The United States and the Soviet Union are official co-sponsors of the peace conference. They will have the responsibility of trying to break deadlocks and to keep the process going. U.S. officials, however, do not expect Moscow to play a very important role.

Secretary of State James A. Baker III, the driving force behind the conference, envisions a three-phase peace process:

I. Ceremonial opening with formal speeches Wednesday in Madrid.

II. Bilateral talks between Israel and its Arab neighbors to begin within four days of the opening ceremony. The one-on-one talks are designed to produce formal peace treaties, although no clear mention of this goal was in the formal invitations issued to the various heads of state. Conference organizers hope to get this phase started in Madrid but it is up to the parties to decide where and when they choose to meet.

III. At some undetermined time, the parties would be joined by Saudi Arabia and other members of the six-nation Gulf Cooperation Council to discuss regional issues such as arms control and cooperative programs on water and economic development. Phase III was added by Baker to make the conference more attractive to Israel.

SOURCES: Los Angeles Times, Times Wire Service, Isreali Consulate

Israel Today

Israel was established under a 1947 U.N. plan to partition Palestine into a Jewish and an Arab state. Israel declared independence and extended its borders in 1948. In the 1967 Six-Day War, it seized territory from Egypt. Jordan and Syria. Israel returned Sinai following the Israel-Egypt peace accord in 1979, and continues to occupy the other territories.

GOLAN HEIGHTS -- Population: 27,000

About 11,000 Israelis and 16.000 Syrians.

Part of Syria before 1967 war, annexed by Israel in 1981.

WEST BANK and EAST JERUSALEM

Population: 1.1 million

More than 1 million Palestinians and more than 100,000 Jewish settlers.

Both part of Jordan before 1967 war; occupied by Israel since 1967. The Israeli government has plans for more than 2,000 homes in West Bank settlements, mainly because of increased Soviet immigration.

GAZA STRIP

Population: 613,300

610,000 Palestinians and 3,300 Jewish settlers.

Administered by Egypt before 1967 war, when Israeli occupation began. SOVIET IMMIGRATION

Since mid-1989, more than 300,000 Soviet Jews have emigrated to Israel. An estimated 200,000 are expected to emigrate in 1991.

In thousands

186,815