Peres Optimistic About Palestinian Talks : Middle East: Israeli vice premier likes prospects for peace. But U.S. Secretary of State Baker is less hopeful.

Stepping up the pressure on hard-liners in his government, Israeli Vice Prime Minister Shimon Peres said Wednesday that obstacles to a dialogue between Israelis and Palestinians “can be solved rather swiftly” and predicted that prospects for peace in the region are “more promising than ever before.”

After meeting with President Hosni Mubarak and other top Egyptian officials, Peres said that a series of new proposals have increased the chances that Israel can agree on the composition of a Palestinian delegation and an agenda for the talks, two of the most troubling issues stalling agreement on a formal dialogue.

Peres, who is also Israel’s minister of finance and head of its Labor Party, told reporters: “Before too long, there is a real chance that a Palestinian and Israeli delegation will meet in Cairo to discuss the issue of elections and the beginning of meaningful negotiations between the two parties. We should not lose sight that we have an opportunity that should not be missed, and a growing feeling in the Middle East . . . that peace is needed for all of us.”

However, in Washington, Secretary of State James A. Baker III discounted chances for a breakthrough in Middle East peace efforts, wire services reported.

“I’m not sure that I would have used the characterization that Mr. Peres used,” Baker told reporters Wednesday after talks with President Ali Abdullah Saleh of Yemen.

“I’m encouraged as a result of the meetings we had here in Washington last week . . . (but) I’m not sure that I’m that encouraged. I think we still have a pretty good ways to go,” Baker said.

Peres came to Cairo as a senior member of the Israeli government but without authorization to speak on behalf of the entire coalition. Indeed, Prime Minister Yitzhak Shamir, through a spokesman on Tuesday, rejected similar positive predictions from Peres, denying that any agreement is at hand.

Sources close to the talks said it is likely that Peres will use the Egyptian visit to step up pressure on Shamir’s hard-line Likud Party, which has resisted attempts to include Palestinians from outside the Israeli-occupied West Bank and Gaza Strip in the Palestinian delegation as well as attempts by the Palestinians to use the dialogue to discuss the future of a possible state.

Earlier this month, Peres threatened to pull his Labor Party out of the fragile coalition government unless the deadlock were overcome. And sources close to Wednesday’s talks said Peres emerged convinced that the inclusion of deportees from the territories in the Palestinian delegation should not remain a stumbling block, even if it means renewing his threat to withdraw from the coalition.

Neither Peres nor Egyptian officials elaborated on the new proposals discussed during Peres’ two-hour meeting with Mubarak. But they likely were linked to reports that Defense Minister Yitzhak Rabin, in meetings last week in the United States, proposed participation of one or two Palestinian deportees from the territories who are not members of the Palestine Liberation Organization and who have no record of guerrilla violence.

PLO officials in Cairo, who asked not to be identified, said the PLO probably would not object to such conditions.

However, the PLO has insisted on maintaining control over any Palestinian delegation, and Peres emphasized Wednesday that it is still Israel’s policy that the delegation to Cairo “should be a non-PLO delegation representing people who reside in the territories and not people who are active outside the territories.”

However, he added: “In my judgment, the Palestinian delegation is free, and can be free to consult with whomever they want. It’s none of our business. . . . “