Vance Sees Severe Harm to U.S. Image : Selling Arms for Hostages Branded as ‘Naive, Wrong’

The Reagan Administration’s Iran policy has had an “extremely negative” impact on U.S. standing as a credible world leader, former Secretary of State Cyrus R. Vance told Congress today.

“The sale of arms to Iran for hostages was naive, wrong and severely damaging to our national interests and credibility,” Vance said as the Senate Foreign Relations Committee opened an examination of Administration policies in the Iran- contra affair.

“To be blunt, this great nation--if it is to remain worthy of global leadership--cannot again manage its foreign relations as an amateur,” Vance told the committee.

Duplicity Will Linger

He said U.S. duplicity in secretly selling arms to a terrorist nation while urging allies not to do the same has created doubts about American credibility that “will linger for at least the remaining years of this Administration.”

Vance, who managed the last crisis involving Iran and U.S. hostages during the Carter Administration, was the leadoff witness in the first of a series of at least five hearings before the Democratic-controlled foreign relations panel.

Vance resigned his post on April 26, 1980, after a daring mission to try to rescue American hostages from Tehran ended in flames in the Iranian desert. He said he opposed on principle any military effort to free hostages.

Shultz Resignation Urged

Since the current foreign policy crisis developed, Vance has suggested that Secretary of State George P. Shultz, who was opposed to the Iranian arms sales, ought to resign. “I don’t see how you can challenge the President when you’re still acting as the secretary of state,” he said.

Sen. Claiborne Pell (D-R.I.), the committee’s new chairman, said his panel’s hearings will complement investigations being undertaken by special panels in both the House and Senate by focusing on foreign policy questions rather than trying to trace exactly how the arms sales to Iran and the alleged diversion of proceeds to Nicaraguan rebels took place.

Vance’s ex-boss, former President Jimmy Carter, said in a speech Tuesday night that the blame for the Iran-contra scandal rests squarely with Washington and not Israel.

“It’s always an almost uncontrollable temptation to try to blame other people,” Carter said at the Front Row Theatre near Cleveland. “I think the facts will show the primary responsibility is in Washington and not in Tel Aviv.”

Secret documents recently released included a White House memorandum, dated Jan. 17, 1986, indicating it was Israel that first suggested the United States sell weapons to Iran. Israel has denied that.