French rapprochement with Israel hailed as 'thaw in the big freeze'

The visit by French President Francois Mitterrand to Israel is being hailed in Jerusalem as the possible beginning of a rapprochement not only with France but also with Europe.

Israel's sense of political isolation has been measurably reduced by the first visit by a French head of state -- made as a demonstrative act of friendliness despite Arab displeasure.

''Thaw in the big freeze'' headlined the Jerusalem Post in describing the French President's arrival March 3.

But Prime Minister Menachem Begin made it clear in the Knesset (parliament) March 4 that the thaw did not make the French position on the Palestinian issue any more acceptable and that that position might, indeed, endanger the renewed spirit of friendship between France and Israel.

Mr. Mitterrand, who also addressed the Knesset, reiterated his call for a Palestinian homeland. ''You cannot expect a people to renounce their identity,'' he said.

The underlying goodwill toward Israel that Israelis perceive in Mr. Mitterrand makes it possible for him to engage the Israeli leadership in a dialogue on the Palestinian issue, unlike other European leaders. The French President's pro-Palestinian position is dismissed by Israel as being dictated by economic interests in the Arab world.

The distancing of Europe from Israel on the Palestinian issue has been aggravated in recent years by personal antagonism between Mr. Begin and a series of European leaders. The prime minister has attacked West German Chancellor Helmut Schmidt as ''greedy and arrogant'' and expressed contempt for Austrian Chancellor Bruno Kreisky, who termed Begin ''a political grocer.''

Relations with London are so frigid that Britain was the only major Western country not to send a Cabinet-level minister or ambassador to the funeral of Moshe Dayan.

Until Mitterrand's accession, France was regarded by Israel as the most antagonistic of all European countries. Paris' sale of a nuclear reactor to Iraq and its pro-Arab political initiative were part of a policy line laid down by President de Gaulle in 1967 after Israel launched a preemptive strike against its Arab neighbors. Prior to that the two nations had enjoyed a ''golden age'' of relations in which France was Israel's prime arms supplier.

Closer political ties between France and Israel are expected to bring increased economic cooperation as well. Israel also hopes that France will help win it better economic terms from the European Community. It hopes, too, that Mitterrand will help redress the Community's unfriendly political tilt. Mr. Mitterrand has already denounced the previous EC Middle East initiative and declared his support of the Camp David accords. Israel would also like French assistance in renewing diplomatic ties in Africa.