Egypt Accepts U.S. Plan to Revive Mideast Talks : Diplomacy: The move clears the way for three-nation talks in Washington.

Egypt, acting as a surrogate for the Palestine Liberation Organization, Wednesday accepted “in principle” a five-point proposal by U.S. Secretary of State James A. Baker III to revive the stalled Middle East peace process.

State Department spokeswoman Margaret Tutwiler said that Egypt’s acceptance clears the way for a three-way U.S.-Egypt-Israel meeting in Washington, probably next month, to thrash out ways of starting peace talks between Israel and a representative delegation of Palestinians.

Tutwiler said that Egyptian Foreign Minister Esmet Abdel Meguid reported Arab approval of the Baker plan, subject to several important conditions. That approach mirrored Israel’s earlier announcement that it would go along with the U.S. proposals, provided that Washington would guarantee that the PLO would have no role in the talks.

Tutwiler declined to reveal the Egyptian conditions. But another State Department official said that Cairo forwarded a PLO demand that it be allowed to help select the Palestinian delegation.

With Israel and Egypt bringing diametrically opposed conditions to the Washington conference, the chances of success appear slim. Even so, the meeting will be the first Israel-Arab talks on the future of the Israeli-occupied West Bank and Gaza Strip in almost a decade.

When Baker advanced his plan Oct. 10, he said that he was prepared to negotiate possible changes in details suggested by either side but only after both Israel and Egypt accept the plan in principle.

Tutwiler hailed Egypt’s acceptance as “a step forward” that clears the way for additional talks. But it was clear that the process will go no further unless both Israel and Egypt agree to far greater concessions than either has been willing to consider.

“We are going to have a very interesting diplomatic time of it over the next few weeks,” a State Department official said. “We are going to be doing some advance spade work.”

In Jerusalem, Yosef Ben-Aharon, a key aide to Prime Minister Yitzhak Shamir, said that Israel will not yield on its refusal to negotiate with the PLO. And he said his government will not “play the game” of allowing Egypt to serve as a PLO proxy.

Baker brought Egypt, the only Arab nation to sign a peace treaty with Israel, into the process to break the impasse over the role of the PLO. In announcing the latest development, Tutwiler emphasized that Washington is talking to Egypt and not to the PLO.

But the PLO clearly is a player. Egyptian President Hosni Mubarak has described himself as a “postman” for the PLO. Israel has complained that Egypt’s role is just a cover for the PLO. And even Tutwiler conceded that “the Egyptians have been talking to the Palestinians.”

Israel has refused to negotiate with the PLO because it considers it a terrorist band. However, it has become clear over the years that peace talks with Palestinians will be impossible without at least the tacit approval of the PLO.

Israel has occupied the West Bank and Gaza Strip since 1967, but the search for a peace agreement covering the territory has become increasingly urgent during the often bloody two-year-old Palestinian uprising.

Last May, Shamir suggested West Bank and Gaza Strip elections to select Palestinians to negotiate with Israel over conditions for limited Palestinian self-rule in the occupied territories. Shamir envisioned the elections as a way to bypass the PLO. But the plan stalled when it became evident that few prominent Palestinians would be willing to participate.

Baker has endorsed the Shamir election plan. He advanced his own five-point proposal to bring about Israel-Palestinian negotiations over details of conducting the elections.

Israeli observers said that Baker’s plan is an attempt to do the impossible: persuade Israel to join talks with a thinly disguised PLO counterpart and persuade the PLO to take up an election plan designed to exclude the organization from the political process.

“Both sides would have to be blind to miss the contradictions,” said Dore Gold, an analyst at the Jaffee Center for Strategic Studies in Tel Aviv.

Baker telephoned Israeli Foreign Minister Moshe Arens on Wednesday to inform him of the Egyptian response. Arens asked for a written copy of the Egyptian position, which Baker agreed to supply.

In announcing Egypt’s acceptance of the Baker plan, Tutwiler made public the five points:

The Israeli delegation will conduct a preliminary “dialogue” with a Palestinian group in Cairo. No date was set.

The United States “understands that Egypt cannot substitute itself for the Palestinians” in the negotiations and it is understood that Egypt will consult with the Palestinians every step along the way.

Israel will attend the Cairo meeting only “after a satisfactory list of Palestinians has been worked out,” a device that would permit Israel to exclude leading members of the PLO.

The United States understands that Israel is coming to the conference on the basis of the Israeli May 14 plan, which deals only with the elections in the occupied territories. But the United States also understands that the Palestinians are free to raise other issues.

The United States invites the Egyptian and Israeli foreign ministers to the Washington conference.

Times staff writer Daniel Williams, in Jerusalem, contributed to this story.