Mideast diplomacy tries to break out of cycle of despair symbolized by Lebanon. Egypt, Israel appear to test waters for reviving peace talks

The leaders of Egypt and Israel, in their most active show of diplomacy in several years, appear to be probing prospects for revival of stalled Mideast peace negotiations. Both Egyptian President Hosni Mubarak and Israeli Prime Minister Shimon Peres are sure to be looking over their shoulders in the process. Mr. Mubarak is glancing mostly at his fellow Arabs and at Washington. Mr. Peres is more preoccupied with political opponents inside Israel.

The recent diplomatic record suggests that while some thaw in the ``cold peace'' between Egypt and Israel may be possible in the short run, any wider progress will be more difficult.

It remains unclear whether, beyond the atmospheric improvement of recent days, the two leaders can find compromise ground on various issues that have long blocked any serious new overall peace talks.

One example is how Palestinians might be represented. Mubarak was quoted Wednesday as saying that widened peace talks would include members of the Palestine Liberation Organization. Israel rejects that formula.

A further Mideast development seems unencouraging: The announcement of a joint diplomatic strategy by Jordan and the PLO has been clouded by different suggestions from each party as to what the accord includes.

Mubarak will, regardless, be looking with special interest at the response of the Americans to the sudden shuffling of envoys between Egypt and Israel in recent days. He is scheduled to visit Washington March 12.

The response so far from the Reagan administration -- whose last venture into Mideast diplomacy, in Lebanon, was less than smooth sailing -- has been cautious.

Peres, for his part, is in the sensitive spot of heading a national-unity government that is likely to prove more unified in name than in fact.

His coalition partner, the Likud bloc of Foreign Minister Yitzhak Shamir, takes a harder line on the West Bank occupation. That issue is key to any widening of peace efforts beyond Israel and Egypt to include parties like Jordan and the Palestinians. Jordan used to rule the West Bank. The Palestinians are the majority of the population there.

Still, the leaders of Israel and Egypt are being careful not to slam any diplomatic doors. That would not help either nation's image abroad. Both of them need to stay in the top two slots on the US foreign aid list.

Yet beyond this, both leaders stand to gain politically if they can evade the considerable political obstacles to reviving the Mideast negotiating process.

For Mubarak, this would be a way of reasserting Egyptian primacy in the Arab world. Peres seems to have an equally important incentive. People who know him say he has forcefully expressed his determination to take whatever political risks necessary to explore any truly promising prospect for peace efforts.

A source recently in contact with Mubarak spoke to the Monitor of a similar determination on his part. But, as with Peres, there was reported to be an ``if'': in Mubarak's case, an insistence that the US resume a front-line role.

At time of writing, these conditions had apparently not been met. Peres is thought to want a compromise formula whereby Israel can resume peace talks without having to deal with the PLO. As for Mubarak, he may well have to wait until his visit to Washington for a clear signal of US intentions.

Yet in terms of diplomatic activity, the past few days have seen genuine movement between Egypt and Israel.

Mubarak has sent his top foreign policy expert for talks with Peres. The envoy, Osama Baz, arrived in Jerusalem without fanfare late Tuesday and began talks lasting well past midnight. No sooner had he left Wednesday than a second Egyptian arrived for talks in Israel.

From the Israeli side, Energy Minister Moshe Shahal met Wednesday with Mubarak in Cairo. Israeli media reported at least one further Peres associate would soon be heading for the Egyptian capital.