US urges Mubarak to bring Israel, Jordan to peace table

Step by step, the Arab quest for a way to reopen the Middle East peace process goes on -- with Washington's blessing and encouragement but not yet direct involvement. President Hosni Mubarak of Egypt, the second Arab leader to visit here in a month, is pressing the United States to increase the amount of its aid to Egypt and to take an active hand in peacemaking. And while he will not leave Washington with everything he wanted, he will not return home empty-handed, administration officials say.

Mr. Mubarak had hoped to focus public attention on his peace efforts, but his visit has been upstaged by the change of leadership in the Soviet Union. Nonetheless, he met with President Reagan in a working lunch at the White House Tuesday. He was also scheduled to attend a state dinner Tuesday night hosted by the President instead of Vice-President George Bush, who today will attend the funeral of Konstantin U. Chernenko.

It is unprecedented for the President to host two social functions for a visiting leader, indicating the importance that Reagan attaches to US relations with Egypt.

The President, however, is not prepared to accept Mubarak's proposal that a joint Jordanian-Palestinian delegation come to Washington as the first step of a revived peace process. Administration officials say the US is not eager to be put in the position of a mediator between Israel and Jordan. Instead, the US is nudging Mubarak to keep the focus of his efforts on getting Jordan's King Hussein to engage in direct talks with Israel.

``Meeting with a joint [Jordanian-Palestinian] delegation is not in the cards, though we're asking more questions about the idea,'' says a White House aide. ``But that doesn't mean we won't ask them to work with us to get to the point later this year where there could be real movement.''

Although encouraged by the swirl of diplomatic activity in the Arab world regarding a new peace process, administration officials say there are practical constraints that at the moment work against a new Middle East negotiation: for one, Israel's need to extricate itself from Lebanon and do something about its dire economic problems.

Moreover, Reagan's immediate priorities are to deal with the new situation in Moscow; get the nuclear arms talks well launched; push his defense program, including the MX missile, on Capitol Hill; and secure funds for the Nicaraguan rebels.

``So we'll keep working on the Middle East issue, and we could do more in a May-June time frame,'' says the White House aide.

Many diplomatic experts on the Middle East say the US has an uncommon opportunity to help bring about a breakthrough in the Middle East peace process, now that Arab leaders have come up with the first serious, if imperfect, initiative since the 1973 war. King Hussein and Yasser Arafat, leader of the Palestine Liberation Organization (PLO), recently issued a five-point peace plan, and Mubarak has urged direct talks between Israel and a joint Jordanian-Palestinian delegation.

But some experts voice concern that in pressing the Arabs to take the initiative toward direct negotitions, the US may be adopting too laid back and neutral a position.

``Sitting back too far could be negative,'' says Harold Saunders, who was assistant secretary of state for Near Eastern and South Asian affairs and a key adviser to President Carter during the Camp David peace talks. ``You can lay back in public pressure, but privately we should be telling him [Mubarak] that we are thinking about a concept of what the we want to do and keep this thing moving along between now and six months, when we could make it flower.''

US Secretary of State George P. Shultz has to overcome a somewhat negative view of him in the Middle East, says Mr. Saunders, who recently returned from a trip to the region. Many Arabs think he is insensitive to them, does not understand the area, and is petulant because of his diplomatic failure in Lebanon.

``People have a confidence problem,'' Saunders says. ``So he has to convey that he's not just sulking . . . but wants to be part of the process and would like the Arabs to consider this or that angle.''

Aside from American support for peacemaking, Mubarak has asked for some $850 million in additional military and economic aid. Administration officials say the US cannot offer anywhere near that amount but will consider some added assistance (besides the $125 million increase already in the 1986 aid budget).

The huge US budget deficit and Israel's need for more aid are cited as reasons for not meeting Egypt's request. Egypt now receives almost $2 billion a year in economic and military aid. For fiscal 1986, Reagan is asking for $815 million in economic assistance and $1.3 billion in military aid, an increase of $125 million.

Israel, for its part, receives $2.6 billion annually, and has asked for $800 million more in emergency aid for fiscal 1985 and an increase of some $1 billion for fiscal 1986. If approved by Congress, this would bring total aid to Israel to $3.4 billion for 1985 and $3.65 billion for 1986.

Egypt, which is having problems paying its debt to the US, also has sought to have its debts cancelled. But the administration points out that US law prohibits forgiving debts from military sales.

With no debt repayments, the US would have to cut off almost all aid.

On another issue, Mubarak has been urged by the President, members of Congress, and American Jewish groups to send an ambassador back to Israel. ``We'd like more to develop in the Egyptian-Israeli relationship,'' says an administration official.

While viewing the recent Jordan-PLO peace proposal as ``highly constructive,'' administration officials stress that it still does not explicitly accept UN Security Council Resolution 242, which calls for Israeli withdrawal from occupied Arab territories in return for secure borders. Nor does the PLO recognize Israel's right to exist.

Informed sources say that not until the gap shrinks between the Israeli and Jordanian-Palestinian negotiating positions on a West Bank settlement will Secretary Shultz involve himself in a peace process. -- 30 --{et