Falklands war: diplomacy gains as losses mount

Sobering losses of men, ships, and planes by both Argentina and Britain in their South Atlantic war have thrust the two countries back toward diplomacy, at least temporarily.

By May 6 attention was largely focused on a mix of ringing public statements and more subtle diplomatic exchanges.

Although the Argentine government rejected the mediation plan put forward by Peru and US Secretary of State Alexander M. Haig, both Buenos Aires and London had responded to United Nations Secretary-General Javier Perez de Cuellar's secret peace proposals with answers that were positive - but qualified.

What was less clear was whether this was, as one UN source hoped, possibly ''the beginning of the end,'' or merely a temporary respite.

Publicly, the two sides are still far apart.

Britain does not see any ''real change'' in Argentina's position. Prime Minister Margaret Thatcher told the House of Commons of her concern that Argentina might be trying to get a UN-sponsored ceasefire without withdrawing its troops from the Falkland Islands - ''a very evident ploy to keep possession of its ill-gotten gains.''

Argentina wants desperately to end the costly and increasingly nasty war. But it is not prepared to budge on the central issue of sovereignty over the islands it calls the Malvinas. To ignore that, say Argentines, is to ignore what the whole war is about. For them, sovereignty is engraved in stone.

Privately, UN sources assert, the positions are not so rigidly opposed. The secretary-general's plan, sent to London and Buenos Aires May 2, is said to contain solid, concrete proposals. These revolve around a number of either simultaneous or precisely phased moves, including:

* A cease-fire.

* Withdrawal of Argentine troops from the islands; withdrawal of the British task force.

* Negotiations on a final settlement while the islands are administered by the United Nations, with Argentine and British observers, and a token United Nations force.

Both sides have already moved quietly but modestly away from their original positions.

After rejecting first the early and then later mediation efforts of Mr. Haig, the Argentines have at least given an initial nod to further discussions about the UN plan. Only time will tell whether this is, as Mrs. Thatcher fears, a ploy to serve their own ends and gain international sympathy or whether it is a first step toward genuine compromise.

In the longer run, Argentine Foreign Ministry officials who once flatly turned down the idea of a lease-back arrangement for the islands today are prepared to give it consideration. Under this possibility, designed to get around the sovereignty issue, Britain would concede sovereignty to Argentina but would be permitted to continue to control the islands under a lease of, say, 50 to 75 years - much like Hong Kong.

Britain, too, has shifted its position slightly. Until this week, the Thatcher government had insisted on an Argentine pullout from the Falklands before it would consider any action of its own. Now Mrs. Thatcher seems to be willing to order the task force to withdraw in conjunction with an Argentine pullout. She has said that such an Argentine evacuation could be supervised by United Nations or United States forces.

If the Argentines do leave, Britain is prepared to be flexible about diplomatic settlement. London is prepared to yield sovereignty over the long term, provided the islanders can choose to retain their British ways. Britain will try to remain in charge of day to day administration for a number of years.

British Foreign Secretary Francis Pym said May 5 that one possible way out could be for the UN to take the islands under trusteeship. Britain would administer them under Argentine sovereignty and the arrangement could only be changed by a vote of the UN Security Council - where Britain has a veto.

This setup, which has some similarities with the lease-back proposal, would allow Argentina to tell its people its sovereignty was untouched. Britain could claim to have ensured the future rights of the islanders.

Meanwhile, the British prime minister has gone along with Mr. Perez de Cuellar's plan at least to the extent of acknowledging it as a framework on which to build more specific proposals. At the same time, the British expressed loud regret that the Argentine government had turned down the parallel mediation effort of Mr. Haig and Peru under which a ceasefire was to have taken effect May 7.

Before the Argentine rejection was announced, British Foreign Office spokesman Nick Fenn, referring to both mediation efforts, commented: ''We want to build on these, but how they will come out in the end is too early to say.''

What the British will not do, however, is put aside their military option while these preliminaries are getting under way. The Thatcher government is concerned that, with its ships tossing on ever worsening South Atlantic winter swells, time is on the Argentine side.

''We must continue with our military activities,'' Mrs. Thatcher said in the House of Commons May 6. ''It would be too easy to say no military activities during negotiations. And what would happen? We should be hamstrung. The (Falklands) people would still remain under the heel of the invader, while the Argentines increased their activities on the mainland, increased their supplies and reserves, in order to attack us at their will.''

She went on to stress ''that any proposals, if they to be acceptable . . . must be precise as to the timing, and the sequence, and the verification of events. . . .''

Argentine military officials are braced for further British attacks. These officials say they would not be surprised if the British went ahead within a matter of days, if not hours, with another onslaught (though not necessarily landing) on the Falkland Islands.Unofficially, some Argentines who are in a position to know the military balance concede that the British fleet has superiority on the sea and a strong capability even in the air. They see the loss of the British destroyer, Sheffield, burned out after being hit by an Exocet missile May 4, as being more of a fluke than a broad representation of Argentine air power. The Argentine fleet now is said to have withdrawn to port. Reinforcements for the British fleet, including additional Harrier jump-jets and more troops to take part in any landing, are en route southward from Britain; they could arrive this weekend or shortly thereafter.

Mrs. Thatcher has defended her actions all along in terms of defending two principles: that Argentine should not have used force in the first place; and that the Falklanders should be allowed to determine their own future. Unless she can tell the House of Commons that she has at least secured an Argentine pullout , her own job will be in danger.

The Argentines, similarly, see the dispute in terms of principle: their 150 -year-old thwarted rights to the islands. No eventual settlement which fails to take into account this basic Argentine position has any hope of success.

''Argentina has clearly stated that its sovereignty over the Malvinas should be recognized as such,'' declared Defense Minister Amadeo Frugoli May 6. ''It is open to any diplomatic negotiations as long as they do not affect its honor and legitimate rights.''

These fundamental differences are what the UN proposals are designed to skirt around. UN sources say that Mr. Perez de Cuellar was well aware of these basic positions when preparing and presenting his peace proposals.

If the two sides can be nudged toward a fuller acceptance of the UN plan, these sources say, it could be put into action very quickly - within 48 hours. The groundwork has been done.

The UN Security Council itself, apart from quietly backing the Secretary-General's efforts, is keeping in the background. The intention is that its next public meeting on the subject be held in reserve either to endorse a Perez de Cuellar success or to condemn any resumption of hostilities.