Setback for PLO and US peace efforts seen in aborted meeting. US envoy and PLO disagree - again - on who speaks for the Palestinians

The United States decision to back out of a meeting with Palestinian notables is widely regarded here as a defeat for the Palestine Liberation Organization. The move comes at a time when the PLO, caught off guard by Jordan's severing of ties with the Israeli-occupied West Bank, is pondering how to carry that unexpected political burden. But the decision Monday night of US Assistant Secretary of State Richard Murphy not to meet with six Palestinians is also viewed as a setback to US peace efforts in the region.

``It's a real, mutual setback,'' says Fayez Abu Rahme, a lawyer from the Gaza Strip and one of the Palestinians on the list submitted to the US for a proposed meeting with Mr. Murphy.

``There ought to be a bridge between the US and the Palestinians,'' he says. ``The possibility to build those bridges is fading.''

An Egyptian official adds: ``We're still at this impasse over who will represent the Palestinians and who will be acceptable to the US.''

Egyptian officials, who believe that the US must accept the PLO as the sole representative of the Palestinian people, had spent days trying to set up a meeting.

Murphy had sought a meeting with Palestinians in Cairo to push the peace process forward, but is bound by a 1975 US commitment not to talk to the PLO until it accepts UN Resolutions 242 and 338 (which recognize Israel's right to exist) and renounces terrorism.

The PLO had thwarted previous attempts by high-ranking US officials visiting the region to talk to so called ``non-objectionable'' Palestinians from the West Bank and Gaza Strip, meaning prominent Palestinians who are not affiliated with the PLO.

But in the wake of King Hussein's decision to distance himself from the occupied territories, the PLO wanted to see if the US would go beyond this position and meet Palestinians living in the Arab world and selected by the PLO, sources here say.

The PLO forwarded to Egypt names of four Palestinians who had already met with Secretary of State George Shultz in Washington: Mr. Abu Rahme, Jerusalem newspaper editor Hanna Siniora, and US professors Edward Said and Ibrahim Abu Lughod.

It also named Nabil Shaath, a Cairo publisher with close ties to Mr. Arafat, and Akram Haniyeh, a West Bank journalist expelled by Israel several years ago and now living in the Tunisian capital.

The US vetoed Mr. Shaath and Mr. Haniyeh. Shaath is not a PLO official but has represented the PLO in the past. Haniyeh is believed to be close to Arafat.

The PLO refused to take the two names off the list, preferring instead to forgo the meeting.

Gamal Sourani, one of two PLO representatives in Cairo, angrily said that the US would not dictate who represented the Palestinian people.

``There is only one choice before the US and that's the PLO,'' Mr. Sourani said. ``We choose who meets, not Murphy.''

Washington's strict interpretation of the 1975 commitment to Israel raises the question of whether the US is being tougher on this issue than a large proportion of Israel's population and even some of its political leaders.

Avraham Tamir, a close aide to Israeli Labor Party leader Shimon Peres and director-general of Israel's Foreign Ministry, was in Cairo for bilateral negotiations on the Taba border dispute. Asked how he felt about a possible meeting between Shaath and Murphy, Mr. Tamir said, ``Positive. Why not?''

The failed meeting also raises the issue of how the US and the PLO can get around the impasse.

The establishment of a provisional Palestinian government, which Arafat has said the PLO is working on setting up, could liberate the organization from previous precepts that have undermined contacts with the US, analysts say.

Such a Palestinian government - distinct from the PLO - could recognize Israel's existence, in effect negating what has been offensive to the US in the charter.