U.S. to Talk With PLO as Arafat Meets Terms : Ambiguities Eliminated, Shultz Says

In a surprising reversal of the U.S. diplomatic boycott of the Palestine Liberation Organization, Secretary of State George P. Shultz said Wednesday that the United States is now ready for direct talks with the PLO because Chairman Yasser Arafat has eliminated earlier ambiguities and reservations from his renunciation of terrorism and his acknowledgement of Israel’s right to exist.

Shultz said that Arafat’s remarks to a Geneva press conference earlier Wednesday removed Washington’s objections to the PLO chairman’s U.N. speech Tuesday and cleared the way for an unprecedented official dialogue with an organization that the U.S. government has long accused of sponsoring terrorism.

During his press conference, Arafat said the PLO “totally and absolutely renounces all forms of terrorism including individual, group and state terrorism.” He affirmed the right of all parties to the Middle East conflict “to exist in peace and security, including the state of Palestine, Israel and their neighbors.”

And he gave unqualified endorsement to U.N. Security Council Resolutions 242 and 338 as the basis for a Middle East peace conference. All three issues had been dealt with during his speech to a special meeting of the General Assembly in Geneva the day before.

Shultz, although asked at his press conference to identify the key changes in Arafat’s statement, did not specify what modifications in language had led to the U.S. decision.

Proclamation of State

Shultz said that the U.S. step is a limited one. He said that Washington will not recognize the PLO’s month-old proclamation of an independent Palestinian state in the Israeli-occupied West Bank and Gaza Strip. He also said that the first item on the U.S. agenda for talks with the PLO “will be the subject of terrorism.”

Shultz said that both President Reagan and President-elect George Bush endorsed his decision to authorize Robert H. Pelletreau Jr., the U.S. ambassador to Tunisia, to begin talks with PLO leaders, presumably in Tunis, where the organization is headquartered. A day earlier, the State Department had said that Arafat’s address to the General Assembly had failed to meet the U.S. conditions that originally were laid down by then-Secretary of State Henry A. Kissinger in 1975.

“I didn’t change my mind,” Shultz said. “They (the PLO) made their statement clear so it didn’t have the ambiguities that earlier statements used.”

The decision followed an intense diplomatic effort by Arab and European governments to persuade Washington to drop its objections to dealing with the PLO. Saudi Arabia’s King Fahd and Egyptian President Hosni Mubarak both contacted Reagan on Wednesday afternoon to urge him to accept at face value Arafat’s acknowledgement of Israel’s right to exist, acceptance of U.N. Security Council Resolutions 242 and 338 and the renunciation of terrorism.

However, the U.S. move is sure to anger Israel, which considers the PLO a terrorist organization and refuses to deal with it in any way.

Shultz said that he views the coming U.S.-PLO dialogue as “one more step toward the convening of direct negotiations between the parties” to the Arab-Israeli conflict. However, asked if Israel can be expected to engage in direct negotiations with the PLO, Shultz said: “I don’t have any reason to believe so.”

“Israel has always made it clear that these conditions, which are U.S. conditions, are not theirs,” Shultz said.

“Everybody has been put on notice since 1975 that if the PLO meets our conditions, we will begin a substantive dialogue,” he said. “Now that we see a change in the position of the PLO, all we are doing is following through on that policy.”

Wednesday’s developments will change the U.S. approach to the Arab-Israeli conflict. Washington has always maintained that Palestinians must be represented at all stages of the peace process for the Middle East. But the United States has refused to talk to the PLO, the organization which all Arab states and most individual Palestinians consider the legitimate representative of Palestinian aspirations.

During Shultz’s unsuccessful effort to get peace talks started earlier this year, the secretary of state repeatedly sought to meet with Palestinians living under Israeli occupation. But his overtures were always rebuffed because the Palestinians maintained that he should talk to the PLO, not to individuals.

Presumably, if James A. Baker III, the secretary of state-designate in the incoming Bush Administration, tries to mediate the dispute next year, he will not be bound by the same restrictions that were placed on Shultz.

Arafat’s words in Geneva were carefully drafted to meet U.S. conditions. According to Administration and diplomatic sources, Sweden served as a go-between in delicate negotiations between the United States and the PLO over the precise wording of the PLO statement.

A U.S. official said that Sweden originally told the State Department that Arafat apparently wanted to meet the U.S. conditions. In response, the Administration outlined those conditions in a letter to the Swedish government with the certain knowledge that the information would be passed along to the PLO.

Sweden then presented the United States with a draft of what Arafat planned to say and asked if it would meet the U.S. conditions. The State Department replied that it would. However, Arafat deviated from that text in his U.N. speech.

Swedish officials said that they urged Arafat to follow the original text at his press conference. This time, the PLO leader said the words that he knew in advance would satisfy U.S. demands, the U.S. official said.

Bush spokesman Steve Hart said that the President-elect supports the Shultz decision and agrees that Arafat has met the U.S. conditions.

Earlier in the day, at a press conference called to announce the selection of Clayton K. Yeutter as the new secretary of agriculture, Bush had said that Arafat’s statements so far had not met the U.S. conditions and had called for “a very clear unambiguous statement.” Bush aides noted that the President-elect’s comments came before Arafat’s news conference in Geneva. After Bush’s press conference, he was briefed by national security officials about Arafat’s statements and concurred in Shultz’s decision to open direct negotiations.

In a related development, Vernon A. Walters, U.S. ambassador to the United Nations, told the special U.N. session in Geneva that both Israel and the Palestinians must make painful concessions if there is to be any hope for peace in the region.

“Israel must face up to the need for withdrawal from occupied territories and to the need to accommodate legitimate Palestinian political rights,” Walters said in a blunt assessment that is sure to further strain U.S.-Israeli relations.

“We must tell the parties that their dispute is resolvable,” Walters said in a speech delivered before the Arafat and Shultz press conferences. “We must tell them that we are tired of this conflict and tired of their unwillingness to make fair compromises.

“We must tell them the time has come to agree that a negotiated settlement is required.”

For Israel, he said, “the choice is clear, albeit difficult,” namely, withdrawal from the West Bank and Gaza Strip, territories conquered during the 1967 Middle East War.

Turning to the Palestinians, Walters declared that “the choice is equally clear, and equally difficult.”

“To achieve the legitimate political rights they deserve and require, Palestinian demands will have to accommodate the reality of Israel’s existence and security needs, and they will have to commit themselves to negotiations with Israel.”

As for the other Arab states, Walters added, “Jordan, Syria and Lebanon have a conflict with Israel to resolve through negotiations. Other Arab states can help by sending signals of acceptance and reconciliation to Israel.”

Times staff writers William Tuohy in Geneva and David Lauter in Washington contributed to this story.