Israel: handling retaliation with kid gloves. Commitment to peace talks, US support, will influence response to Arab terrorism

Israel is struggling to find a response that is tough on Arab extremists -- but not so tough as to drive away moderate Arabs from the delicate Middle East peace process. Israel's response to last Friday's terrorist attacks on its airline counters at airports in Rome and Vienna will be significantly influenced by its perceptions of United States' support and by Prime Minister Shimon Peres's commitment to the Mideast peace process, analysts here say.

Unlike the days prior to Israel's Oct. 1 raid on the Palestine Liberation Organization's (PLO) headquarters in Tunis, Israeli policymakers appeared yesterday to be carefully laying diplomatic groundwork for a pin-point strike at Arab extremists in an effort to prevent damaging future peace moves.

Officials argued that once a target has been isolated as a menace, it could be legimately attacked without detriment to peace efforts.

``I don't think that retaliation in the past, such as Tunis . . . weakened the peace process,'' a senior official said. ``When we have extremists and terrorists, and we know where they are, they ought not be left unpunished. I think tolerance toward extremism and terrorism is weakening the peace process more than firm action against them.''

The officials were apparently responding to American messages to Israel calling for a ``measured response,'' which would take into account the possibility that the PLO was not involved in the attacks.

Defense Minister Yitzhak Rabin said the Abu Nidal splinter group, which broke off from the PLO in 1974, was apparently behind the attack. Mr. Peres pointed a finger at Libya, calling it ``the center of international terrorism today.''

The airport attacks were directed against peace moves, Peres said, ``but it definitely does not weaken our determination to proceed with the peace process. We are not unaware of the American considerations.''

Other officials insisted, however, that Israel reserved the right to act in its own interest.

``If we are perceived to be under the knuckle of our friends when we are hit, it will only encourage those [anti-Israeli] forces to go on hitting. We do have to consider the opinion of our friends,'' one official said, ``but we are engaged in an existential struggle with the forces of terror.''

According to Tel Aviv University's Shai Feldman, an expert on US Middle East policy, Israeli policymakers are closely watching the nuances in the US position -- especially differences which have apparently arisen between US Secretary of State George Shultz, who advocates vigorous counterterror action, and other administration officials who are concerned about alienating possible negotiating partners in the Arab world.

``A lot depends on the Israeli assessment of the true American position,'' Feldman says, adding that Peres will try to avoid moves sharply opposed by Mr. Shultz.

At the same time, he says, Peres is constrained by his own heavy investment in efforts toward peace talks with Jordan. In a departure from earlier practice, Israeli leaders have refrained from alluding to the Palestinian guerrilla presence in Jordan.

Both Peres and Shultz, Feldman says, are ``torn'' between a desire to tackle the terrorist challenge head on, and the need to keep alive the fragile peace process.

Israeli officials are also trying to reduce expected foreign opposition to military retaliation by calling for international cooperation against terrorism, specifically between Israel and the US. Foreign Minister Yitzhak Shamir said in a radio interview that ``daily'' contacts between the US and Israel showed that both countries shared ``a complete condemnation of terrorism.''

Mr. Shamir, possibly reflecting the mood in his right-wing Likud Party, also indicated that restraint would not necessarily promote peace. Recent political initiatives in the Middle East, he said, ``have not brought us any closer to peace, and have not weakened terrorism, because hatred for Israel is a constant tendency among many elements in the Arab world.

``Nothing we can do to appease, to show readiness for compromise, influences them,'' Shamir said. ``Sometimes we get the impression that the opposite is true. The more Israel lowers its voice and takes steps showing a strong desire for peace, the more the Arabs interpret it as weakness, and step up the war of terror.''