Palestinians Paper Over Dispute

THE Palestine Liberation Organization (PLO) has contained a potentially serious rift with the Palestinian negotiating team to the Middle East peace talks, marking a personal victory for chairman Yasser Arafat but masking deep divisions with the Palestinian camp over its negotiating position with Israel.

Mr. Arafat averted a political crisis on Friday by yielding, at least in theory, a bigger role to the Palestinian delegation by forming a joint coordinating committee. The delegation, and the three top negotiators who had threated to resign, were formally announced to be part of the PLO.

"Unfortunately the PLO decision did not address the substantive issues regarding the Palestinian negotiating strategy. It has focused on procedural issues and avoided the serious questions," says Ghassan al-Khatib, a delegation member. Rift over concessions

Mr. Khatib shares the view held by other delegation members and PLO officials, including the staunchest supporters of the peace process, that the leadership is making too many concessions without securing an Israeli commitment to withdraw from territories it occupied in 1967.

Arafat's maneuvers, analysts say, secured personal victories on two fronts. The coordinating committee, comprised of senior PLO officials and top delegation members, will have the authority to work out the Palestinian strategy in the talks. Previously, the PLO appointed the delegation and drafted their positions.

But by appointing delegation leader Faisal Husseini, spokeswoman Hanan Ashrawi, and deputy chief negotiator Saeb Erakat to the PLO leadership, the first time Palestinians from the Israeli-occupied territories were appointed to senior PLO posts, Arafat retained his control over the decisionmaking process. Shift for Israel

According to political analysts and Palestinian officials Arafat's move also has challenged the Israeli government to open direct talks with the organization.

Over the last two months several secret contacts have taken place between PLO and Israeli officials but the Israeli government still refuses to accept a direct role for the organization in the process. That may change, now that the delegation is officially part of the PLO.

"It makes no difference to us," Israeli Foreign Minister Shimon Peres said Friday, referring to the new arrangement. "They're the same delegation members, the same names, the same people, the same procedure."

The Palestinian crisis was triggered by the threatened resignation last week of Mr. Husseini, Ms. Ashrawi, and Mr. Erakat in protest against the PLO failure to consult the delegation over its response to a proposal by the United States on interim Palestinian rule in the Israeli-occupied West Bank and Gaza Strip.

The three, who retracted their resignation after an emergency meeting with Arafat in Tunis, complained that the PLO had bypassed the delegation by conveying the Palestinian response through Egypt.

The US proposal, presented in a "declaration of principles" and accepted by Israel, urges the Palestinians to accept a transfer of civil functions in the occupied territories without an agreement on jurisdiction on land. It also states that any agreement will constitute fulfillment of UN Resolutions 242 and 338, which call for the return of all land occupied by Israel since 1967.

Most troubling for the delegation, however, is that the US proposal does not refer to the West Bank and Gaza Strip as occupied territories, nor does it raise the status of Jerusalem.

During US Secretary of State Warren Christopher's recent Middle East trip, Arafat bypassed the delegation, sending a response to Mr. Christopher through Egypt to use the US proposal as a basis for negotiations, with some modifications.

According to interviews with PLO officials, the majority of Palestinian officials and negotiators oppose the way the PLO leadership is dealing with the US proposal.

Interestingly, chief Palestinian negotiator Haider Abdel-Shafi, who has been the most outspoken public critic of PLO leadership, refrained from submitting his resignation. Dr. Abdel-Shafi had publicly called for the suspension of Palestinian participation in the talks and urged immediate democratic reforms in the PLO. But during last week's meeting in Tunis, Abdel Shafi surprised the attendants by arguing in favor of continuation of Palestinian participation in the peace process.

Sources close to Abdel Shafi say that one reason that prevented the chief Palestinian negotiator from resigning is that he is now convinced that he should remain inside the process to preempt further concessions by the PLO.

Secretary Christopher explicitly asked the Palestinians to accept an Israeli early empowerment plan, which would transfer control of most of the Israeli civil adminstration functions - short of security, foreign affairs, and control of the land and resources - to the Palestinians.

PLO officials came out with different and sometimes contradictory answers when the outspoken Ashrawi challenged them to lay out the PLO negotiating strategy.

Ashrawi's concerns, which are shared by the rest of the negotiators, to a large extent reflect concerns that the delegation would find itself responsible and be blamed for accepting concessions.

When Husseini said upon his return to Jerusalem Friday that the Tunis meeting has unequivocally proved that the delegation is part of the PLO, he was not just challenging the Israeli government but sending a message to his constituency in the territories that the PLO leadership is and will be responsible for any compromise reached.

Analysts say differences over Palestinian strategy will resurface during the next round of talks, which is scheduled to convene in Washington Aug. 30.