Summit Seeks to Isolate Libya : Reagan, Thatcher Prodded Reluctant Allies on Statement

President Reagan teamed up with British Prime Minister Margaret Thatcher on Monday to prod reluctant allies into rewriting a weak draft declaration on terrorism, producing what they hoped would be seen as a concerted challenge to Libyan leader Moammar Kadafi.

But coaxing five other leaders to agree to the final, five-paragraph statement required Thatcher to “hammer away” at French President Francois Mitterrand and required Reagan to hint at further U.S. military action, aides said.

“Why should this summit concern itself with terrorism?” Reagan asked in a confidential paper he gave to the other leaders. “One reason . . . is the need to do something so that the crazy Americans won’t take matters into their own hands again.”

The result was a statement that singled out Libya by name and listed six steps against terrorism that the summit nations agreed to support.

But while American and British officials declared the statement a triumph for their leaders, it still fell short of Reagan Administration wishes.

France’s minister for external relations made a point of puncturing the appearance of Western unity, announcing that his government does not consider the sanctions called for against Libya to be “strictly obligatory” and that it will allow Kadafi to keep his embassy in Paris.

And economic sanctions against Libya, which the Administration has been urging on Europe for several years, were never even seriously discussed.

Meeting of ‘Sherpas’

The process of bringing all seven nations to a joint position on terrorism began weeks before the summit meeting, when working groups of foreign policy specialists--dubbed “sherpas” after the Nepalese mountaineers who guide climbers up Himalayan peaks--met to produce an initial draft.

The result was a bureaucratically cautious paper that neither named Libya nor offered specific steps to deal with terrorism. Both Reagan and Thatcher arrived in Tokyo already determined to reject it.

At a working dinner Sunday night at the official residence of Japanese Prime Minister Yasuhiro Nakasone, Reagan and Thatcher came armed with position papers that “became the focal point for a much more muscular approach,” an Administration official said.

‘Line Must Be Drawn’

Reagan’s 10-page paper called for “a communal doctrine of tactical cooperation” and spelled out in blunt language the essence of the Administration’s position: that terrorism threatens to turn Europe’s capitals into copies of Beirut and that “a line must be drawn” against its perpetrators.

The leaders ordered their sherpas into a hotel conference room for the night to produce a revised draft.

Their task was to reconcile the zeal of Reagan and Thatcher with the wariness of the Japanese and the insistence of Mitterrand that the summit could only recommend policy changes, not require them.

But the result was predictable. In an effort not to offend one another, the sherpas produced a document that skirted every controversial issue.

‘Better Part of Valor’

“At 4:30 in the morning, the sherpas decided that discretion was the better part of valor,” an Administration official explained.

For example, he said, the new draft even omitted the word extradition from its recommendation that countries hand over suspected terrorists to each other, for fear of offending legal sensitivities in some of the seven countries.

When the leaders gathered again Monday morning, around a conference table in the “Birds and Flowers Room” of the state Guest House, Thatcher picked up her copy of the sherpas’ new draft.

Scribbled in one corner was the judgment of one of her top aides: “Pretty weak.”

The British prime minister immediately led a charge to toughen the statement, arguing that extradition should be mentioned explicitly and that Libya should be accused by name of sponsoring state terrorism.

Thatcher Begins Lobbying

With Reagan cheering her on, Thatcher began the task of lobbying Mitterrand, who insisted that a stronger statement was not necessary.

“She carried a lot of water,” said a White House official of Thatcher. He noted that Reagan and Mitterrand are polar opposites--both politically and personally--and said that Reagan was probably incapable of persuading Mitterrand to change his mind on anything.

By midday, Mitterrand had backed down on the issue of naming Libya and agreed that the statement could include a list of concrete steps that countries could take against terrorism.

But his aides immediately made it clear that France still considered the list only a series of non-binding recommendations.

No Curbs on Embassy

French External Relations Minister Jean-Bernard Raimond told reporters that he has no intention of ordering Kadafi to close his embassy in Paris, as the statement recommended.

“We want to maintain a relationship,” Raimond noted.

Times staff writers Sam Jameson and Andrew Horvat also contributed to this story.