TURMOIL IN THE EAST BLOC : Allies Discuss Berlin; Baker Urges Caution on German Reunification : Diplomacy: The secretary wants full consultations before considering a WWII peace treaty.

Secretary of State James A. Baker III, making his first visit to this divided city since the wall began to crumble, said Monday it is too soon to consider finally signing a World War II peace treaty, which would clear away one obstacle to German reunification.

Talking to reporters on the flight from London, Baker said that East and West Germany must consult fully with their neighbors and with the four wartime victors before moving toward unity.

“We think it would be premature to talk now about convening a peace conference, certainly premature in advance of full and complete consultations among all of the Allies,” he said.

The United States, Britain, France and the Soviet Union retain substantial legal powers, especially with regard to Berlin, as a result of the defeat of Nazi Germany 44 years ago. Those powers can only be surrendered after a peace treaty is signed.

“There has never been any peace treaty signed between the Allies and Germany, and there are certain retained rights which the four powers have,” Baker told reporters. As one example, he cited guaranteed access to Berlin by the wartime Allies.

Reunification was thought to be a key topic Monday when the four powers met for the first time in 18 years. U.S. Ambassador to West Germany Vernon A. Walters spent nearly three hours with his counterparts, Christopher Mallaby of Britain, Serge Boidevaix of France and Vyacheslev Kochenasov of the Soviet Union, who is based in East Berlin.

A curt statement issued afterward said there was “a common understanding of the importance of stability” in the divided city.

The envoys climbed into their limousines without comment after the conference at the Allied Control Authority building in West Berlin.

The three Western ambassadors outlined proposals from the “Berlin Initiative” set forth by then-President Ronald Reagan two years ago, according to the joint communique.

The initiative, which the Soviets have refused to even discuss until now, touches on expanded air traffic between East and West, a plan for Berlin to host the Olympic Games in the year 2004 and use of the divided city as a center for East-West dialogue.

The last time the Allied diplomats sat down together was in 1971, when they signed the four-power agreement on security and other crucial matters concerning the city’s status.

The Soviet ambassador “made some general comments” and “expressed favorable interest” in the Berlin Initiative, according to the American statement issued after Monday’s meeting.

Further meetings “at appropriate levels” may take place, the statement added.

Reunification was also on the minds of tens of thousands of demonstrators who turned out for Monday’s weekly rally in a half-dozen East German cities, with more than 150,000 reported in Leipzig. At some of the rallies, shouting matches broke out over whether Germany should reunite, the official East Germany news agency ADN reported.

The issue is a heated topic in East Germany, where opponents frequently warn against “selling out” to West Germany. Prime Minister Hans Modrow and the new Communist Party chairman, Gregor Gysi, both have spoken out against it.

The U.S. government has long favored German reunification in principle, but it has become more cautious since the upheaval in East Germany has increased the likelihood that unification might actually take place.

Although U.S. officials will not say so publicly, they are known to believe that West German Chancellor Helmut Kohl is being driven by the right wing of his own Christian Democratic Union to favor unification at a pace much faster than Washington thinks prudent.

Baker said the European Community summit last weekend in Strasbourg adopted a policy for German reunification that is much closer to the U.S. position than it is to the 10-point program outlined by Kohl earlier this month. Kohl failed to consult the United States in advance of his speech, something which is known to have annoyed some top U.S. officials.

Nevertheless, Baker hopes to reassure Kohl that the United States considers West Germany one of its closest allies. Baker and Kohl meet today in West Berlin.

Baker’s talks with Kohl are expected to be a mirror image of discussions he had Monday with British Prime Minister Margaret Thatcher and her new foreign secretary, Douglas Hurd.

In describing his meetings with Kohl and Thatcher, Baker struggled to show rhetorical equality.

“We will probably have a--perhaps a--I don’t want to say more extensive--we will have, I am sure, an extensive discussion (with Kohl),” he said. When a reporter suggested that he was looking for the word “equal,” Baker said, “Yeah, an equally extensive discussion.”

The secretary of state, who has been scheduled for several weeks to visit West Berlin before a meeting of NATO foreign ministers in Brussels on Thursday and Friday, added a stop in London to his schedule last week after British newspapers asserted that the longstanding U.S.-British “special relationship” has been superseded by a new Washington-Bonn relationship.

But Baker insisted that the Washington-London friendship is intact.

“The relationship with Great Britain is extraordinarily special,” Baker told a British Broadcasting Corp. television reporter outside Thatcher’s 10 Downing St. office.

Later, on the flight to Berlin, he said, “I just read a story in the London press that this airplane was ordered to London at the last minute. That is not correct. I decided three or four days ago that we ought to make this trip--in part because the special relationship between the United States and the United Kingdom has been called into question.”

He said he wanted to “reaffirm and reconfirm” the tie.

The reports of a Washington-London rift began after President Bush, speaking in Brussels after the Dec. 2-3 Malta summit, advocated “intensified” efforts at integration of the European Community. Thatcher, who has expressed strong doubts about the process of integration, was miffed by the Bush speech.

Baker said he now believes that the rift can be cured simply by avoiding words like “intensified.” He said he intended to do just that.

In other developments Monday, East Germany’s leading opposition group, New Forum, announced that it will take part in free elections proposed for May 6 and build its own parliamentary faction.

Delegates are to be selected at a meeting Jan. 6 and 7 in Leipzig, according to the group, which claims about 200,000 members.

The crippled East German Communist Party, scheduled to resume an emergency congress this weekend, has stressed a willingness to participate in any coalition government.

The party, weakened by widespread corruption and the public demands for democracy, admits having lost one-quarter of its 2.3 million members since the grass-roots revolution began in mid-October.

In Bonn, the West German Interior Ministry announced Monday that 317,548 East Germans have emigrated there this year, 17,000 of them in the past 10 days alone.