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The Mideast: hopes restrained

THE stage would seem to be set for some dramatic new developments in the Middle East. But one of the leading actors may yet muff his lines - or deliver them so ambiguously that the audience may be hard pressed to tell what's happened. The West Bank uprising has brought new world attention to the Palestinian cause, even though the uprising got under way without any particular direction from the Palestine Liberation Organization.

The renunciation by Jordan's King Hussein of any control over the West Bank has implicitly challenged the PLO to demonstrate real political leadership.

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And so with the spotlight on the PLO's chief, Yasser Arafat - less because of his own actions than because of others' - there is eagerness to hear what he might say in a possible address to the United Nations this fall. Many Palestinians are saying he will indeed recognize Israel; a more cautious view is that anything he says which sounds like recognition of Israel will still sound to some like rejection. Over the years, he has been criticized for equivocating as much as he can without actually losing control of his fractious organization.

Some basic tensions exist within the PLO between West Bank Palestinians looking to accept a two-state solution and the more radical Palestinians of the diaspora. And the organization seems to be struggling to set a new strategy. But a relative degree of unity is also apparent.

UN General Assembly Resolution 181, a 1947 measure endorsing a two-state solution for the British mandate of Palestine, has been rediscovered as a possible vehicle toward Mideast peace. Arafat could, under 181, announce a ``provisional government'' (which lays claim to territory but acknowledges incomplete control of that territory).

Resolution 181 would, however, redraw the map of Palestine with Israel back to its pre-1967 borders, and one can imagine how well that would play in Israel.

On the other hand, it is hard to imagine what the PLO might do to get favorable attention of the current Israeli government.

Despite troubles with the domestic economy, Likud appears likely to win in this fall's election, and without a need for a coalition with Labor.

Paradoxically, though, attitudes on the return of the West Bank have changed. Sephardic (``Oriental'') Jews voted for Likud because they like its toughness, but they don't have the same missionary zeal as European Jews do about ``greater Israel''; the Sephardim are more willing to return the occupied territories and live in peace with their Arab neighbors.

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In any case, recognition of Israel and acceptance of UN Resolutions 242 and 338 is the price of negotiations with the United States, and once an American-PLO dialogue were under way, Israel would have to be brought in sooner or later.

The Reagan administration's decision this week not to appeal a ruling allowing the PLO to retain its UN observer mission in New York was a victory for the diplomats in the US government over less temperate elements in Congress. But it was also a signal to the Palestinians that the US will not forever hound them. So was the decision to investigate allegations of unfair labor practices on the West Bank - charges which, if proved, could make Israeli goods ineligible for duty-free import into the US.

A central question has long been, When will the PLO play its Israel card? From the Palestinian point of view, the later the better; but there is such a thing as too late, too.

Circumstances are favorable for the card to be played now, and seasoned observers are hopeful. But their hope is restrained.

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