West Rejects Soviet Proposal on German Forces : Reunification: Some parts of a final settlement were agreed on at the two-plus-four talks. But a U.S. official said Moscow’s plan was ‘dead on arrival.’

The six-nation German reunification talks approved some elements of a final settlement Friday but bogged down over a Soviet attempt to limit the powers of a united Germany.

The “two-plus-four” negotiations among the foreign ministers of the two German states and the four victorious powers of World War II also set a goal of completing their work by November, although officials cautioned that much remains to be done.

The United States, Britain, France and the two Germanys rejected a Soviet proposal to clamp new restrictions on the German army to make it “incapable of offensive operations” and impose other limits on issues ranging from alliance membership to the seemingly trivial matter of protecting Soviet war memorials.

A senior U.S. official said the Soviet plan was “dead on arrival.” Nevertheless, a controversy over the Soviet proposal could blunt progress toward unification because all six participants must agree on a final settlement.

Secretary of State James A. Baker III said the Soviet plan was unacceptable because it would impose restrictions on German sovereignty, singling out Germany for treatment not accorded other nations.

The three Western allies have stressed the need to avoid imposing specific conditions on a unified Germany, arguing that such “singularization” could sow the seeds of resentment and future political difficulties.

Baker said all six nations accepted the outline of a preamble and articles on borders and Berlin. While those issues were by far the easiest to handle, Baker said the action marked significant progress in the talks, which began last month.

All of the parties but the Soviet Union want a short final settlement that would welcome German reunification and end the rights and responsibilities that the four victorious nations accorded themselves over a defeated Germany in 1945.

But Soviet Foreign Minister Eduard A. Shevardnadze presented a complex proposal which a senior U.S. official described as an attempt to “put everything but the kitchen sink” into the two-plus-four settlement.

For instance, Shevardnadze said the six nations should impose a ceiling on the manpower of the military forces of a united Germany. He did not suggest a level.

He also suggested a complex formula for determining German alliance membership. At the time of unification, Shevardnadze proposed, the new government should assume all of the treaty obligations of both of the existing states, including West German membership in the North Atlantic Treaty Organization and East German membership in the Warsaw Pact. Changes could be made after five years but only by “mutual agreement of the parties concerned.”

If adopted, this would seem to give Moscow and other Warsaw Pact members a veto on German membership in NATO. Officials of both existing states have said they want to affiliate a unified Germany with the Western Alliance.

Shevardnadze implied that Soviet objections to German membership in NATO could evaporate if NATO and the Warsaw Pact agree to a nonaggression pact and establish a procedure for regular consultations.

Although they did not endorse the specific Soviet plan, both Baker and British Foreign Secretary Douglas Hurd said a NATO summit meeting starting July 5 in London would change the alliance in ways that would make it seem less threatening to Moscow.

A senior U.S. official said Shevardnadze’s hard-line proposal might have been prepared for home consumption in advance of the Soviet Communist Party Congress scheduled to open July 2.

Answering questions at a press conference, Shevardnadze indicated that he is prepared to be flexible.

“The points in our draft are not regarded by us as the final truth,” he said. “We are ready to accept compromise approaches.”

The response seemed to typify the Soviet approach, which was, by turns, tough and conciliatory.

For instance, on a symbolic level, Shevardnadze agreed to accept a “final settlement” instead of insisting on a formal peace treaty. A ranking U.S. official said a treaty, coming 45 years after the war, would “rub the Germans’ noses in it.” He said such a procedure is unacceptable to Washington, Bonn and other Western countries.

Shevardnadze also agreed with the other five nations on an accelerated timetable that could complete unification by the end of this year. The foreign ministers set a goal of completing their work before a planned November summit meeting of the 35-nation Conference on Security and Cooperation in Europe.

“We intend to have a final agreement settling all aspects of German unity before the end of this year,” Shevardnadze said.

The foreign ministers referred all outstanding differences, especially the ones raised by Shevardnadze’s proposals, to a committee of lower-ranking officials of the six governments.

West German Foreign Minister Hans-Dietrich Genscher sought to calm Soviet concerns. Noting that the conference took place on the 49th anniversary of the Nazi invasion of the Soviet Union, Genscher said, “Today is a day of painful memories of 1941.”

He pledged that Germany would “reflect and respect the security interests of the Soviet Union.” But he said Germany will settle for nothing short of unrestricted sovereignty.

Although he was consistently alone against his five colleagues, Shevardnadze drew most of the attention with his series of proposals. In addition to his suggested limits on German powers, he proposed a phased withdrawal of all U.S., British, French and Soviet troops stationed in both German states.

He called for the four nations to cut their forces “first by 50% and then bring them down to a level of token contingents.”

He made an even more dramatic proposal to eliminate all foreign forces from Berlin within six months of unification.

Baker said the proposal was unattractive because it would leave Berlin “surrounded by 380,000 Soviet troops” that are expected to remain in East Germany for at least a transition period after unification.

After the two-plus-four session, Baker and Shevardnadze met for two hours and 10 minutes at the residence of the Soviet ambassador to East Germany to discuss matters left over from the Washington summit. They agreed to meet again next month in Paris in conjunction with the next two-plus-four session.

In a related development, a state treaty between the two Germanys on a currency, economic and social union cleared its final legislative hurdle Friday, winning passage in the upper house of the West German parliament, the Bundesrat.

The treaty, which is to go into effect July 1, constitutes the cornerstone of unification.

At one point, it had seemed as if the opposition Social Democrats might try to use their majority in the Bundesrat to block the treaty, but it passed easily.

The East German Parliament and the lower house of the West German Parliament, the Bundestag, approved the treaty Thursday.