Taba: symbolic but pivotal Mideast snag. Israel-Egypt rift on Sinai could jeopardize peace

A triangular slice of Sinai sand has come to symbolize the Reagan administration's diplomatic frustration in the Middle East. An all-out effort by the Americans in the past two months has conspicuously failed to bring the fate of Taba -- an area of less than one square mile -- before a panel of arbitrators.

Now all sides are saying that a meeting scheduled for May 15 may be the make-it-or-break-it session in which negotiators either reach agreement or declare an impasse and pitch the issue back into the laps of their governments.

Some US administration officials are said to believe that nothing less than the future of the 1979 Israel-Egypt peace treaty -- the United States' most spectacular regional diplomatic success -- hangs on the resolution of the Taba dispute. They also believe the US's inability to resolve Taba damages its credibility in Arab eyes as the one nation that can ``deliver Israel'' at a negotiating table, if peace talks ever start.

``There are people in Washington who believe that until we get Taba resolved, we can't go on to anything else,'' a knowledgeable Western observer says.

``Taba is the only diplomatic game in town,'' a US diplomat says more bluntly. Failure to resolve the dispute ``is endangering the relationship on which 11 years of American foreign policy in the Middle East has been based.''

Last January, Israel agreed in principle to submit the question of Taba's sovereignty to binding arbitration. In return Egypt would unfreeze the cold peace that has existed between the two nations since Israel's invasion of Lebanon in 1982.

Teams of Egyptian, Israeli, and US experts have met periodically since January, to work out the terms of arbitration and the steps that will be made toward ``normalization.''

Progress has been tortuously slow. In April, the US administration pulled out all stops. Undersecretary of State for Near Eastern and Asian Affairs Richard Murphy was sent on a shuttle mission between Egypt and Israel. The normally bland Mr. Murphy chaired a series of increasingly heated meetings with negotiators for each country in an effort to resolve the differences between the two nations over the formulation of a question that will be put to a arbitration panel.

``He really knocked heads. He pushed both the Egyptians and the Israelis very hard,'' a Western diplomat says, ``and he came close.'' But in the end, Murphy failed to settle outstanding differences.

The Americans, who have kept a team of diplomats and lawyers involved in the Taba dispute for years, have found themselves bedeviled by the complicated domestic politics at play in both Egypt and Israel. Taba has become loaded with emotional symbolism -- both for the Israelis, who control it, and the Egyptians, who claim it.

In Egypt, President Hosni Mubarak is faced with a vocal opposition that points to Israel's control of Taba as proof of Israel's failure to live up to the peace treaty that cost Egypt its place in the Arab world.

Weakened by an ongoing economic crisis, Mr. Mubarak is reluctant to take the politically unpopular step of improving ties with Israel without the assurance that he will be seen as having wrested Taba from the Israelis, analysts here say.

His need to ensure victory on Taba has apparently moved Mubarak to toughen Egypt's stand. ``The Egyptians are terrified of losing,'' one source close to the negotiations says. ``Mubarak will be in deep trouble if this thing goes to arbitration and then Egypt loses.''

Israeli Prime Minister Shimon Peres also is constrained by domestic politics. The rightist Likud half of his government resisted sending Taba to arbitration and insists that a tangible improvement in Israeli-Egyptian relations must occur before the dispute is settled. Likud portrays Mr. Peres's seeming willingness to resolve the dispute as an example of his ``softness'' vis-`a-vis Arabs.

The Americans say the remaining issues are so small that one side or the other will bend to avoid a collapse. If the dispute were to remain unresolved, one diplomat predicts, ``then we will see a terrible deterioration in Egyptian-Israeli relations. Nothing sudden, it will just go downhill for years. There will be a lot of hostility and you won't see any tourists going back and forth.''