Arias Asks for Cutoff of Contra Aid : Meets Reagan, Asks Congress to ‘Give Peace a Chance’

President Oscar Arias Sanchez of Costa Rica met with President Reagan today and then appealed to Congress to “give peace a chance” in Nicaragua by cutting off aid to the contra guerrillas.

Arias is the prime mover in Central America for a peace settlement that stops support for such guerrilla movements as the contras, the centerpiece of Reagan’s efforts to curb what he calls Soviet-sponsored subversion in the region by Managua.

Arias was greeted by a standing ovation and shouts of “Bravo!” as he strode into the packed House chamber, escorted by House and Senate leaders, to address Congress.

The British-educated president delivered his 30-minute speech in English.

Needs Time for Settlement

He told the legislators he needs time to forge a peace settlement in Central America.

“During the last few days Costa Rica has again exerted all of its moral authority to encourage dialogue in El Salvador and Nicaragua leading to prompt negotiation of a cease-fire,” Arias said.

“If the guns fall silent, and if brother no longer kills brother, this dialogue will have proved its worth.

“Let us restore faith in dialogue and give peace a chance,” Arias said. “Let us not allow fear to prevail.”

Optimism About Deadline

Arias previously has expressed optimism that a cease-fire could be attained by Nov. 7, the deadline set in his peace plan that was signed in Guatemala City on Aug. 7.

Reagan plans to seek a $270-million aid package for the contras after their present $100 million expires Sept. 30, the deadline for a cease-fire and democratic reforms called for in a peace plan proposed Aug. 5 by Reagan and House Speaker Jim Wright (D-Tex.).

“The countries of Central America are now talking with each other,” Arias said. “We ask for assistance in this Central American dialogue.

“We have set deadlines. Above all, we strive for common goals. Some steps may be taken before those deadlines expire, others may require a longer period.

“We will not fall into a trap set by someone who shows us a calendar every day, anxious to bury the last hope,” he said in a statement of defiance.

“Neither you nor we will choose war when we can make peace. Neither you nor we will honor as heroes men who lie or cheat. Neither you nor we will refuse to look to a future that holds out a promise of more free men, more democracies, more justice and more peace.”

In the White House session, Arias agreed with Reagan’s plan to provide new humanitarian aid to the contras and to oppose a unilateral cease-fire by the Sandinistas, an Administration official said today.

The official, who asked not to be identified, also said Arias would support “drastic sanctions” against Nicaragua if it does not follow through on promises to institute democratic reforms.

Although Arias has warned that Reagan’s intention to seek new contra aid could derail his peace plan, the Administration official said the Costa Rican, in his meeting with Reagan, did not oppose $3.5 million in humanitarian aid the Administration wants for the contras for the next month or so.

The official said, however, that the two leaders did not discuss Reagan’s proposal for $230 million over 18 months in new military aid.