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Let's not fritter away this opportunity in the Middle East

THE Arab-Israeli conflict has been reshaped and clarified during 1988, mainly by the effects of the Palestine uprising. Most significant was its impact on the Palestine Liberation Organization and Yasser Arafat. A radical change in policy toward Israel was overwhelmingly approved by the PLO National Council in November and elaborated by Arafat at the December UN session in Geneva.

The PLO recognized the right of Israel to exist in peace and security. It explicitly accepted the 1947 UN Resolution 181, which partitioned Palestine into an Israeli and Palestinian state.

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It agreed to negotiate peace with Israel on the basis of UN 242, which calls for Israeli withdrawal from territories occupied in 1967 (the West Bank and Gaza) in exchange for peace within secure borders.

It renounced terror in any form, while reaffirming the Palestinian right to resist Israeli occupation.

It declared a Palestinian state on the West Bank and Gaza.

It endorsed safeguards for security such as guarantees, UN forces, and confederation with Jordan.

At Geneva, Arafat urged Israeli leaders to come to negotiate ``so that together, we can forge'' true peace, based on justice, and assuring dignity, freedom, peace, and security for all involved in the Arab-Israeli conflict.

After Arafat succinctly restated the key points the next day, the US dropped its ban on talking with the PLO.

Israel's position on these issues was starkly stated in the program of the new Likud-Labor coalition agreed on last week:

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Israel will not withdraw from occupied lands in exchange for peace despite UN 242. It will add eight new Israeli settlements on the West Bank to the 130 or more already created in violation of international law.

Israel will ``never'' accept a Palestinian state. Yet UN 181, on which Israel's legitimacy depends, also decreed a Palestinian state.

Israel will ``never'' negotiate with the PLO regardless of its position.

Israel will continue to use violence (``an iron fist'') to repress the Palestinians and try to destroy the PLO.

Quite clearly Israel is the road block to any peaceful solution based on UN 242. The new PLO position spotlights Israel's intransigence. Already, in order to becloud the situation, Shimon Peres is floating proposals for elections in the occupied territories, and Prime Minister Yitzhak Shamir is talking about autonomy for the Palestinians, ostensibly based on the Camp David accords. These are diversions to obscure the rejection of UN 242 and a free Palestinian homeland. This impasse will pose an early test for the Bush administration.

Its first step should be to clarify US interests in the Middle East. It should recognize that Israel is not a strategic asset. In those terms the Gulf oil states are much more vital. US interests will be jeopardized by continued instability or possible hostilities that could inflame Arab extremism.

Israel's present course is also contrary to its own long-term interests. It violates the shared values and alienates most other nations. Either absorbing the Palestinians or keeping them in subjection will ultimately change the nature of Israeli society. And continued repression and tension could provoke hostilities involving missiles with highly lethal warheads on both sides. The consequences would gravely damage broader US interests, especially if the US is identified with Israeli actions by its support.

Thus its own interests as well as friendship for Israel should impel the US to pursue forcefully the chance for stable peace based on respect for the concerns of both Israel and the Palestinians.

That will require reversing Israel's present course. In the effort to do so the US must try to dramatize the fateful consequences for Israel of missing the potential chance for peace. Hence its strategy should combine two complementary components:

(1) It should seek to make the benefits of the peace option as concrete and real as possible for the Israelis, and to show how the risks can be minimized by safeguards. It should encourage the PLO and moderate Arab states to join in this effort. With the help of enlightened US supporters of Israel, it should stress that a balanced peace accord will provide the best assurance for continuing US support for Israel's security and welfare.

(2) Conversely the US should emphasize the costs and risks of Israeli rejection of exchanging the occupied territories for peace pursuant to UN 242. It should be candid about how such a course will eventually undermine US support, - financial, military, and political. And the US should warn Shamir that any new settlements will result in cutting US aid for Israel.

The chance for a peaceful solution simply must not be frittered away. US failure to press Israel to comply with UN 242 will surely undercut moderates in the PLO and Arab states and strengthen extremists. That must not be allowed to happen.

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