PLO Insists on a Voice in Picking Delegates to Talks : Middle East: But a senior official says the response to Baker’s peace proposal is ‘substantially positive.’

The Palestine Liberation Organization has forwarded a “substantially positive” response to Secretary of State James A. Baker III’s proposal for a direct Palestinian-Israeli peace dialogue, a senior PLO official said Sunday.

However, the PLO is continuing to insist that it participate in selecting the Palestinian delegation, said the official, who asked not to be identified.

“Our position in principle is the PLO selects the delegation as the sole representative of the Palestinian people, and these would be from inside and outside” the Israeli-occupied West Bank and Gaza Strip, he said.

An initial draft of the response was delivered Saturday to Egypt, which is working with PLO officials and American diplomats to draft a statement that will represent the organization’s final response, according to sources close to the negotiations.

For weeks, the PLO has delayed any response to the dialogue proposal, at one point seeking “clarifications” to ensure that it would be able to appoint the Palestinian delegation and that any talks would not be limited solely to Israeli Prime Minister Yitzhak Shamir’s plan for elections in the occupied territories.

Israel had accepted the Baker plan, but only based on “assumptions” that no representative of the PLO would take part in the talks and that, contrary to the PLO’s demands, the talks would be limited to elections for an interim period of limited self-rule in the territories.

PLO sources said the organization is continuing to insist on having a role in appointing the Palestinian delegation, leaving an open agenda for the talks and conducting any talks only as a prelude for convening an international conference for peace in the Middle East.

“We delivered our response on Saturday, and I consider, all in all, it’s positive,” said one official.

However, the organization is consulting with Egypt before delivering a final draft to the United States, because “we don’t want to make troubles with anybody,” he said.

PLO officials refused to comment on reports Sunday in two Israeli newspapers, the Jerusalem Post and Haaretz, that the organization had approved Baker’s five-point plan based on U.S. assurances that the PLO would be permitted to play a behind-the-scenes role in any negotiations.

According to Haaretz, Israeli Foreign Minister Moshe Arens protested the reported guarantees, complaining in a message to Baker that Israel is being forced into indirect talks with the PLO against its wishes.