Iraq Crisis Hurts Israel Peace Effort : Mideast: PLO support for Hussein complicates the process. Some Jewish leaders say a dialogue is even more timely. Others want to avoid contact.

Because of the crisis over Kuwait, Israeli moderates appear to be sharply divided over renewing talks with Palestinian leaders aimed at reviving the Middle East peace process.

Widespread Palestinian support for Iraq’s President Saddam Hussein has depressed and angered generally left-wing Israelis who argue that establishing a dialogue with the Palestinians is more important than ever.

“I think it is most important for the government of Israel to talk with Palestinians and the PLO (the Palestine Liberation Organization),” said Amnon Goldblum, a spokesman for the Peace Now organization.

“South Africa should be an example to us. President (Frederik W.) de Klerk talked to (nationalist leader) Nelson Mandela even though he was the representative of a terrorist organization.”

Unless the Israelis make a similar move and talk with the Palestinians, Goldblum said, there will probably be more Palestinian violence and more Israeli violence in response.

“This attitude of the government--not talking to Palestinians--encourages extremism,” he said, “and I worry about the character of Israel and our democracy.”

Yael Dayan, a dovish Labor Party member of the Knesset and daughter of the late Gen. Moshe Dayan, says it is necessary to maintain contacts with the Palestinian leadership, despite the anger at the Palestinian support for Hussein’s invasion of Kuwait.

“We have to be thinking about the morning after this crisis,” she said in Tel Aviv. “The Palestinians will still be here, and we will have to have a dialogue. I think it is a tremendous mistake to stop talking to them. Sure, we disagree with them on more things than we agree on, but disagreement is a form of dialogue. We have eventually to cooperate with Palestinians. We have no other choice.”

But others involved in the peace process have changed their emphasis in the face of the Palestinians’ support for President Hussein. Yossi Sarid of the Citizens Rights Movement declared:

“I personally do not feel the need for meetings with Palestinians now. I feel as if a lot of wires have been cut, and it will take time until I feel a need for meetings of this type. I think we are talking about such a deep misunderstanding that I do not see us on the same platform in the near future. This is a wound that will take a long time to heal.”

Eleazar Granot, chairman of Mapam, the United Workers Party, said the PLO, by supporting Iraq, “has placed a serious question mark over whether it will represent the Palestinian nation in future negotiations.”

“The Palestinian response is unfortunate,” he went on. “They are pinning the fate of the Palestinian nation on the success or failure of this man.”

Prof. Amnon Rubinstein, a Knesset member for the Shinui Party, said the Palestinians’ action was “political stupidity, since their stand ensures that the start of talks about peace is further off.”

Rubinstein argued that the PLO’s position on Iraq does not alter the need “to find a settlement with the Palestinians.”

“We cannot swallow them up, we cannot digest them, and we cannot expel them,” he said. “Within a short time, the Palestinians will discover that all their dreams and all Saddam Hussein’s rantings are worth nothing.”

A leader of the Citizens Rights Movement, Knesset member Dedi Zucker, said: “Even the grave mistake made by the Palestinians now is not enough to move me from my basic position, that our basic interest demands the separate development of two nations, separation and the erection of a demilitarized Palestinian state next to Israel. But you have to be an idiot not to understand that the Israeli public will be less sensitive to this issue in the near future.”

The Israeli press has given prominent play to statements by liberal Jewish Americans such as Prof. Alan M. Dershowitz of Harvard Law School and Menachem Rosensaft, who met with PLO Chairman Yasser Arafat, saying they were re-examining their pro-Palestinian positions because of the PLO stand on the Iraqi invasion.

Still, peace supporters such as Dayan and Goldblum insist that the very pro-Iraqi stance of the Palestinians is evidence that the peace process is necessary.

“Had there been peace talks under way in Cairo,” Goldblum said, “Israel couldn’t have been cast as a villain by Saddam Hussein.”

In any event, Goldblum said, “the peace camp in Israel is not going to sleep. We have to keep active, if not in talking to Palestinians then in watching where (Israeli) settlements go in the occupied territories and in reducing Arab hostility toward us.”