Shultz Fears More Volatile Middle East : Secretary Ends Futile Mission; Arabs, Israel Told to Shed Illusions

Secretary of State George P. Shultz, winding up a futile Middle East peace mission, said today that extremism and an arms buildup could engulf the region unless Arabs and Israelis shed their illusions.

He said the United States will not slow its efforts to prod the two sides into negotiations, adding that he would like to have another try at Mideast diplomacy before the Reagan Administration ends in January.

“The underlying problem won’t go away by itself and can’t be wished away,” Shultz told a news conference. “Nor can it be ignored. The lives and well-being of too many people are endangered by the continuation of this conflict.”

Egypt the Only Supporter

During five days in the region, he met with leaders of Israel, Jordan, Egypt and Syria and found support for his plan for two-stage negotiations only from President Hosni Mubarak of Egypt, whose nation is at peace with Israel.

At the White House today, spokesman Marlin Fitzwater said President Reagan wants Shultz to persevere in his peacemaking efforts.

“The President has been living with the Middle East situation for seven years, and he certainly knows how intractable the situation is,” Fitzwater said.

Fitzwater said Reagan’s position “is the same as the secretary’s, which is (that) there doesn’t seem to be much reason for optimism at the moment, but we’re not going to give up.”

Mubarak repeated his limited endorsement in a statement to the Middle East News Agency after holding a final meeting with Shultz today.

“The American initiative has some positive points and some other points that need more alterations. We have to accept these positive points and to work on developing the other points,” Mubarak said.

Asked ‘to Come Back’

“We ask him (Shultz) to come back time and time again. There is something new in each trip, more understanding . . . viewpoints.”

Shultz had said he found “universal interest in finding a way to move forward” with his peace initiative.

He planned to stop in Madrid for a meeting of the North Atlantic Treaty Organization on the way home.

The trip was his fourth to the region this year in an effort to convene a peace conference, take up the problem of Palestinians in the Israeli-occupied West Bank and Gaza Strip and then move to an overall settlement.