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Toll in West Bank violence rises, even as Israelis show interest in US peace efforts. PALESTINIAN PROTESTS

As statesmen and diplomats pressed the search for a Middle East peace settlement, the violence in the Israeli-occupied West Bank and Gaza Strip yesterday escalated after a two-week lull. Two Palestinians were killed and 24 wounded in scattered violence on the West Bank Monday, said the Palestine Press Service. These deaths, the first since Jan. 15, brought to 41 the number of Arabs killed by Israeli gunfire since rioting began in the occupied territories Dec. 8.

Following hundreds of reports of beatings of Palestinians by Israeli soldiers last week, the armed forces appear to have reverted to the use of live ammunition.

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In the West Bank village of Anabta yesterday, shooting started after three Israeli cars were stopped by a roadblock erected by Palestinian demonstrators in the town. An Army spokesman said it was not clear whether it was a police officer or Israeli civilians who opened fire on the crowd, leaving two dead and four wounded. A day earlier, a Jewish settler on the West Bank was seriously injured when his car was struck by a Molotov cocktail.

The latest strife occured against the backdrop of a rare display of unity by the leaders of Israel's coalition government behind a new American peace initiative announced last week in Washington.

Diplomatic observers say the plan, which sidesteps the sensitive issue of an international peace conference, has given Prime Minister Yitzhak Shamir a politically palatable way to back peace talks, an issue so far dominated by his coalition partner, Foreign Minister Shimon Peres.

But the plan has drawn fire from hard-line members of Mr. Shamir's own Likud bloc, including former defense minister Ariel Sharon. In a statement Sunday, Mr. Sharon said he would fight the plan and urged the expansion of Israeli settlements in the territories as a precondition to any form of Palestinian autonomy.

The US plan, loosely patterned after the autonomy provisions of the 1979 Camp David accords, calls for an interim agreement containing elements of Palestinian self-rule. These would be followed by direct talks, possibly under the auspices of an international conference, to negotiate the final status of the territories.

``If you strip all this down,'' says a source in Jerusalem, ``you'll find the same elements you've heard for years,'' - including direct talks, some form of international conference, and self-rule. ``You try to make a salad in which each party finds one ingredient that will tempt it to swallow the whole thing.''

Whether this latest diplomatic initiative survives depends initially on whether Jordan is willing back negotiations not formally launched under the auspices of an international conference, say analysts in Israel.

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Even if King Hussein, who met with US special envoy Philip Habib this weekend, agrees to go along, the reaction of the Palestinians themselves remains a key variable. As the King himself tacitly acknowledged in a recent interview, the uprising has weakened Jordan's role as a bargaining agent for the Palestinians.

Palestinians are almost certain to recoil at Shamir's insistence that Israel will not withdraw from any of the territories as part of an autonomy arrangement.

Analysts warn that if the current flurry of diplomatic activity leads nowhere, Egypt and Jordan will be under increasing pressure to support Syria's rejectionist position on negotiating with Israel on the Palestinian question.

``Violence in the territories won't make it any easier to get on the peace process bandwagon,'' cautions the source in Jerusalem.

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