NEWS ANALYSIS : Longing for Reagan : Israelis See Bush Shifting on Terrorism

With the crisis over hostages moving Sunday into laborious and tense diplomatic give-and-take, Israeli officials turned to pondering a shifting relationship with the United States over the issue of terrorism and how to deal with it.

More and more, leaders here are speaking with longing for the days of President Ronald Reagan, who they felt was more in tune with Israel’s crusade against its enemies than is President Bush.

During its eight months in office, the Bush Administration has done a couple of things that Israel views as undermining its battle with terrorism. Last week, it criticized the abduction of a Lebanese Shiite Muslim clergyman by Israeli commandos, and it has continued to maintain the Reagan Administration’s contacts with the Palestine Liberation Organization, which Israel views as a part of a web of terrorist organizations out to strangle the Jewish state.

“We, of course, consider the United States to be still an ally. But the alliance is changing,” a Foreign Ministry official said.

Although there is no indication that Israel’s abduction of Sheik Abdel Karim Obeid was meant in any way to provoke the United States, Israeli officials recognize that Washington has been shaken up and see the event as a plus.

Speaking on the hostage crisis at week’s end, Defense Minister Yitzhak Rabin referred acidly to American paralysis: “The fact (is) that Israel took the initiative . . . brought up the issue that too many people tried to forget.”

Israeli officials suggested that criticism from Bush was due in part to his discomfort over being reminded that he had done almost nothing to free the hostages. Bush’s policy toward the hostages was a guise for inaction, Israeli officials argued.

“We exposed impotence, and then they tried to blame us,” a Foreign Ministry official remarked.

In the midst of this dispute between two allies, a factor emerged to serve as a counterbalance to attacks from the Administration: the U.S. Congress. Aside from some negative reaction, notably from Bob Dole, the Senate minority leader from Kansas, many members of Congress sided with Israel, agreeing with its position that Shiite extremists should be blamed for harming the hostages, not Israel for having kidnaped Obeid.

‘Helping Hand’

“This helping hand from Congress is becoming something of a trend,” the Foreign Ministry official said.

He said that Israel has repeatedly complained to the Bush Administration about U.S. talks with the PLO but that it was the Senate that responded, with a resolution forbidding contacts with terrorists who have American blood on their hands.

“With Reagan, we were more on the same wavelength. Now, we go to Congress to get our point across,” the Foreign Ministry official said.

That policy is not a guaranteed success. American Jewish groups that once could be relied on to back Israel’s every stand are divided. Some opposed a discarded version of the resolution on the PLO that would have tied Bush’s hands more tightly.

In any case, the Foreign Ministry official said that the Administration’s attitude is “understandable.”

“The U.S. is not a country at war, while we are,” he said. “Israel is more ready to use violence. And we are more ready to negotiate. The U.S. takes a middle road. They say ‘no ‘ to negotiations and then they do it. They say ‘no retaliation,’ then they do it--badly.

“The truth is that the Americans today are saying, ‘We cannot do anything about our hostages, but we are very happy if someone else does it for us.’ ”

Israeli Resentment

When Bush called on all parties in the Middle East to release hostages, Israel refused, seeing no symmetry. In fact, Israeli leaders resented being thrown into the same rhetorical basket with Arab extremist groups that seize hostages.

Yediot Aharonot, the largest circulation newspaper in Israel, commented with disdain: “Hopefully, a turnabout has indeed occurred in U.S. public opinion, which, after the initial hysterics, now better understands what has happened and what is happening. But these hysterics--partly directed against us--were caused by the lack of expressions of clear and unequivocal leadership in the U.S.”

The hostage crisis has eclipsed the continuing controversy over Washington’s contacts with the PLO. Israel opposes the meetings because the Jerusalem government fears it is being boxed into talks with the group.

Under a plan put forward by Prime Minister Yitzhak Shamir, Israel would hold elections in the occupied West Bank and Gaza Strip for Arabs to select representatives to peace negotiations. The negotiations would specifically exclude PLO adherents.

But Washington keeps talking with the PLO, giving the group a say in how the future talks should proceed. Last week, State Department envoy John Kelly met in Jerusalem with both Israeli officials and Palestinians who back the PLO.

Delivered Proposal

Kelly, assistant secretary for Near Eastern and South Asian affairs, delivered a proposal from the PLO to form a joint delegation composed of Palestinians from both inside and outside the occupied territories. This delegation would then meet with Israeli officials to discuss the election plan.

The outsiders would not be members of the PLO, but sympathizers; all the delegates would be selected by the organization.

The inclusion of Palestinians from abroad has both symbolic and political implications. Symbolically, it would reflect a view of Palestinians as a cohesive people who are dispersed by circumstances and have just claims to a homeland. Diplomatically, it would represent a victory for the PLO, whose constituency includes adherents outside as well as inside the West Bank and Gaza Strip.

Finally, letting the PLO choose the delegation, even if the selection is disguised, would be tacit recognition of the group as the legitimate Palestinian representative.

The proposed formula would probably raise a political storm in Israel. Shamir is already under fire for holding talks with PLO loyalists from the occupied territories. But he has been willing to talk to them because they are local residents. He has staunchly refused suggestions that the PLO, which is based in Tunisia, is an inevitable negotiating partner.