Reviving Israel's Peace Plan

AGAINST long odds, last ditch efforts are being made to breathe life into the latest effort to resolve the tenacious conflict between Israelis and Palestinians. An Israeli plan unveiled six months ago calls for elections leading to talks on the future status of the occupied West Bank and Gaza Strip. But so far, the two sides have been unwilling to compromise on the ground rules for holding elections, leaving peace prospects in limbo.

Diplomatic observers say that rescuing the proposal from the fate of earlier Middle East peace plans now largely depends on events in Cairo and Washington.

Egypt. Partly because it is trusted by both sides, Egypt has been thrust into an important mediator's role in the Israeli-Palestinian dispute.

``Everyone is looking to the Egyptians to bail us out,'' says one Western diplomat in Israel.

The focus of Egypt's diplomatic efforts has been a package of 10 ``conditions'' designed to bridge the gap between Israel and the Palestinians on the election plan.

Following a meeting with Egyptian President Hosni Mubarak on Monday, Palestine Liberation Organization chairman Yasser Arafat was said to be poised to back the conditions, despite the fact that they omit any reference to a role for the PLO in future peace talks.

But Egypt's efforts could falter in the face of opposition by Israel's Prime Minister Yitzhak Shamir, partly because Mr. Shamir opposes the land-for-peace formula embodied in the conditions.

For its part, the United States backs Egypt's mediation role, but has declined to endorse the conditions outright. Israeli sources speculate that one reason is that open US backing could provoke a government crisis in Israel, since many Labor Party ministers have responded positively to the Egyptian conditions.

Failing agreement on its proposed conditions, analysts say, Egypt's last recourse would be to back creation of a Palestinian delegation to engage Israel directly on the as-yet-undefined details of its election plan.

Both Shamir and Mr. Arafat are believed to be reluctant but convinceable on the matter. The main sticking point will be the issue of including ``diaspora'' Palestinians - which Arafat wants and Shamir opposes - as the opening wedge to direct PLO participation in the peace process.

Such a delegation could prove the only viable means of getting to elections, perhaps even directly to negotiations. The alternative will be almost certain diplomatic stalemate, analysts predict.

The United States. While all parties acknowledge that the US is essential to any peace settlement, the Bush administration is now in the throes of an internal debate over just how far it should wade into the troubled waters of Middle East diplomacy.

One catalyst for the debate has been the issue of how to respond if, as expected, Arafat requests a visa to attend meetings of the UN General Assembly this fall.

One group of advisers, led by senior political appointees, is making the case to Secretary of State James Baker III that there is little to be gained and much to lose by issuing a visa, informed diplomatic sources say.

These advisers point out that the last time Mr. Baker took a risk for peace, by telling Israel in a major address last May to ``lay aside ... the unrealistic vision of a greater Israel,'' his only reward was a critical letter signed by 95 US senators. Granting a visa now, they say, would only provoke more congressional criticism and a crisis in relations with Israel, which insists that approving a visa would reward Arab extremism.

Since the Israeli-Palestinian conflict does not impinge significantly on US strategic interests in the region, these advisers are said to caution, the only prudent course is to play it safe by refusing a visa, easing up on the PLO dialogue, and adopting a lower profile in the region.

A second group of advisers, primarily made up of experienced Middle East experts in the department, is said to argue that refusing a visa would weaken the US role as honest broker in the region, thus diminishing prospects for a diplomatic settlement.

Following the Reagan administration's refusal to grant a visa to Arafat last year, the General Assembly pulled an end run by convening a special session in Geneva to discuss the Arab-Israeli conflict. It was at Geneva that Arafat made the two concessions - recognizing Israel and renouncing terrorism - that opened the way for the start of the US-PLO dialogue.

These advisers say that by granting a visa this year the US could open the door to further diplomatic gains. They argue that the PLO chairman is now open to the concept of a delegation to enter into pre-election negotiations with Israel. By granting a visa, the US could enable Arafat to take such a step in the face of opposition within the PLO. The US should also press for the inclusion of diaspora Palestinians in such a delegation and encourage Israeli Defense Minister Yitzhak Rabin, who has backed the idea with qualifications, to convince Shamir to go along, they say.

Since Arafat is under increasing pressure from extremists within his own ranks, these advisors warn, the opportunity for constructive US action could be lost within months.

``People with experience in Middle East affairs believe that now is the time to strike,'' summarizes one Western diplomatic source. ``People more sensitive to domestic political concerns are advising caution.''

``If Arafat gets the visa it will be a signal that the activists have the upper hand,'' adds the source.

Even if the US adopts the more activist position, other factors will make it difficult to breathe new life into the Israeli plan.

One is that Shamir is now said to be more convinced than ever that he has the luxury of outwaiting the Palestinians, whose 21-month intifadah or uprising, which helped prompt the Israeli initiative in the first place, is seen by some Israelis as faltering.

Another factor is continuing Palestinian distrust of the motives behind the Israeli plan, described by one Gaza Arab last week as ``only a ploy by Israel to quell the intifadah and drive a wedge between Palestinians inside and outside the territories.''

West Bank and Gaza sources also challenge the Israeli view that local Palestinians are ready to break ranks with the PLO if the PLO fails to give the green light to participate in elections.

While it was pressure from the territories that prompted Arafat to make concessions in Geneva last year, these sources acknowledge, the roles have now been largely reversed. What Arafat is now hearing from the street activists is that he should hold the line on further concessions until and unless Israel reciprocates.

To get to elections, Arafat will have to be persuaded that the PLO will not be excluded from talks on the final status of the territories, analysts agree.

``If the PLO can be convinced that an interim settlement won't be permanent and that it might have a role to play in the next stage - without defining the end of the process as an independent state - then we may yet have a peace process,'' concludes Hebrew University Middle East expert Eytan Gilboa. ``It's difficult, but not impossible.''