Foreign Minister Shimon Peres indicated Sunday that Israel is willing to discuss the swap of 400 Arab prisoners for an Israeli combat flier missing in Lebanon but would not do so in public or under pressure from any ultimatum.
In Beirut, meanwhile, the kidnapers of American educator Alann Steen dropped off a videotape of the hostage with a Western news agency. In it, Steen reiterated the kidnapers' message that he and three fellow captives face "execution" if Israel fails to release the 400 Arab prisoners by today.
"Israel cannot and will not act according to an ultimatum," Peres told Israel radio after a Cabinet meeting.
"If anyone has any offers, he should please turn to Israel in an orderly fashion and he will be given an orderly answer," he said.
'Not Through the Media'
"There are things which must be conducted not through public appearances and through the media," Peres said.
Nabih Berri, the head of Lebanon's Shia Amal militia and Lebanon's justice minister, suggested at a news conference in Damascus, Syria, on Saturday that he could arrange the exchange of the Israeli airman, as well as foreign hostages in Lebanon, for the 400 Arab prisoners. Seven Israeli servicemen are missing in Lebanon.
Some officials, however, appeared to cast doubt on Berri's ability to deliver on his proposal. Berri's Syrian-backed organization is at odds with the pro-Iranian Shia extremists believed to hold most of the 25 foreigners, including eight Americans.
"This (Berri's offer) is designed for public relations, not for concrete action," Moshe Arens, a minister without portfolio, told Israel army radio before the Cabinet meeting.
"From past experience, one cannot rely at all on statements made through the media. No negotiation can be conducted through such statements," he said.
When the extremist Islamic Jihad for the Liberation of Palestine first issued its death threat last week, Prime Minister Yitzhak Shamir said that releasing the Palestinian prisoners was "out of the question."
However, Israel's policy could change if a swap involves freedom for Israeli captives in Lebanon.
"Israel gives top priority to the fate of its missing, hostages and prisoners. Israel won't spare any efforts to bring its sons and soldiers home," the military said in a statement.
An Israeli military official said last week that some Arabs were being held in Israel, while others were detained by an Israeli-backed militia in southern Lebanon in the village of Al Khiam. The kidnapers have never specified which prisoners they want released.
In May, 1985, Israel freed 1,150 Palestinian guerrillas from its jails in a swap for three Israeli soldiers captured in Lebanon. This trade aroused public indignation because of its lopsided proportions. Critics accused the government of backing down from Israel's traditionally tough anti-terrorism stand.
A six-minute videotape showing Steen, 39, a native of Boston, was delivered to a Western news agency in the name of Islamic Jihad for the Liberation of Palestine, which kidnaped Steen and three other faculty members from the campus of Beirut University College on Jan. 24.
The group's other hostages are Robert Polhill, 53, of New York City; Jesse Turner, 39, of Boise, Ida.; and Mithileshwar Singh, 60, a native of India and resident alien in the United States.
A weary-looking Steen, reading from a statement in a monotone, said on Sunday's videotape: "If our lives are important to America, it must order Israel to release the 400 Palestinians as soon as possible--that is, Monday as a maximum.
Warns of U.S. 'Stupidity'
"We also tell America that if it commits any stupidity, we will be prone to be killed. Besides, Americans in the whole world will be the victims of our Administration's stupidity.
"They (the captors) do not fear death because they perceive it as the start of their life; in other words, America can't scare them through its military actions."
Steen, who read from the statement in a halting manner, looked uncomfortable on the videotape and ended with the words, "Signed by the Islamic Jihad for the Liberation of Palestine."
Steen, a professor of communications, wore eyeglasses and a small beard grown since his abduction. A text of the statement, apparently in his own handwriting, was delivered along with the tape.
Berri, meanwhile, backed away Sunday from an earlier weekend statement that Anglican Church hostage-negotiator Terry Waite was about to be freed. Waite has been missing since Jan. 20.
Berri, in Damascus, said: "My information is that they will release Mr. Waite soon. I did not say in 24 hours or 48 hours. I said days, weeks and not months." He did not say who is holding Waite.
Another group of hostage-holders, the Revolutionary Justice Organization, delivered a statement Sunday to the Beirut newspaper An Nahar, accompanied by a photograph of American hostage Edward A. Tracy, who was abducted Oct. 21.
The picture showed a smiling Tracy, 56, formerly of Burlington, Vt., in a dark blue running suit. The group also holds American Joseph J. Cicippio, 56, of Valley Forge, Pa., and a Frenchman.
Imminent U.S. Attack Alleged
The statement said the United States plans an imminent air and sea landing in two residential districts of Muslim West Beirut to seize prominent leaders of Hezbollah (Party of God), a group of pro-Iranian Shia extremists, and swap them for foreign hostages.
The statement claimed that U.S. warplanes would simultaneously attack Hezbollah bases in the Bekaa Valley under cover from Israeli jets.
"Some places where the hostages are believed held, and the place of Waite, have been located through a detection device that was planted in his (Waite's) body" and monitored by intelligence equipment, the group said.
The targets for the attack, code-named "Operation Raven," have been pinpointed by a "signal-sending wireless detector fitted on Waite's body," the statement said.
In London, a Church of England spokesman called the charge "absurd."
"We're not really commenting on any of the many, often conflicting rumors that have been coming out of Beirut . . . except to say that the rumors of a bugging device seems to be one of the most unlikely of all," the church said in a statement.
Since Waite disappeared nearly three weeks ago during a mission to seek freedom for foreign hostages, there have been reports that he was being held against his will. But the Church of England has said it is unable to confirm that.
The Beirut newspaper L'Orient le Jour claimed in its Sunday edition that Waite had been released and would surface Sunday in the Syrian-occupied Bekaa Valley in eastern Lebanon. Police said they could not confirm any release.
There were widespread reports Saturday that Waite had been released. But more than 24 hours passed without any sign of him.