Baker and Assad Hold Marathon 7-Hour Talks : Diplomacy: The unusual meeting without aides suggests serious bargaining.

Secretary of State James A. Baker III plunged into the most intensive talks of his Middle East mission on Wednesday, meeting with Syrian President Hafez Assad for a marathon seven hours.

To the surprise of officials from both countries, the talks at Assad’s modest presidential palace here stretched past midnight into a previously unscheduled dinner in the early hours this morning.

For at least five hours of the talks, Baker and Assad met one on one, with no aides present beyond interpreters--an unusual event that suggested to diplomats that the talks had turned into a detailed bargaining session.

After the talks, Syrian spokesman Jibrane Kourieh said the two men agreed to pursue “a just and comprehensive peace” in the Middle East.

“It has been agreed to continue efforts and contacts between the two governments,” he said.

Kourieh said the talks also touched on the future of Iraq after the Persian Gulf War, attempts to restore order to Lebanon and Syrian efforts to win freedom for the six American hostages held in Beirut.

American officials declined to comment on the contents of the talks.

Baker’s meeting with Assad was critical to the success of his effort to launch a new set of Middle East negotiations, because Syria has long been the most radical and uncompromising Arab state on Israel’s borders.

“It’s a fact of life that you can’t make peace in the Middle East without Syria, and the Syrians don’t want us to forget that,” a U.S. official said before Baker’s talks began.

Baker has been traveling the Middle East asking the Arab countries, Israel and the Palestinians to join him in looking for issues on which they can agree instead of fight.

Eight Arab governments, including Syria’s, endorsed Baker’s general approach last weekend, and Israel gave its broad approval on Tuesday. Baker also met in Jerusalem with 10 Palestinian leaders from the Israeli-occupied West Bank and Gaza Strip, who said the Palestine Liberation Organization had approved their participation in the talks.

At each stop, Baker has said that he wants to get peace talks going on “two tracks”--one between Israel and the Arab countries, and the other between Israel and the Palestinians.

“I have seen what I consider to be at least signs of new thinking,” Baker said in Jerusalem. “I have seen what I consider to be a willingness to consider new approaches.”

Before Baker saw Assad, U.S. officials said the talks were expected to touch on several issues:

* Steps the United States wants Syria to take in pursuit of peace with Israel. Among the steps, officials said, could be some form of recognition of the Jewish state.

* A variety of other issues on which the United States is trying to devise “confidence-building measures” between Israel and the Arabs, including regional arms control arrangements, water resources and trade.

* The future of Iraqi President Saddam Hussein, whom Assad has long counted as a bitter adversary. Syria has served as a base for Iraqi opposition groups, which complained earlier this week that the United States is not doing enough to drive Hussein from power.

* The future of civil-war-torn Lebanon, where Syria now holds preponderant power. President Bush has pledged that a major aim of the U.S. Middle East initiative will be to bring peace to Lebanon.

* And the twin issues of Syria’s support for terrorist groups and Assad’s efforts to win freedom for the six Americans held hostage in Beirut. U.S. officials have praised Assad for his attempts to win the hostages’ release even as they have complained about his links with terrorists.

Syria wants two rewards from the process, diplomats said:

* First, political recognition as one of the most influential Arab states, especially on the issues of the Palestinians and of Lebanon.

* Second, aid to support the country’s uneven economy, in two forms: direct payments from Saudi Arabia and economic cooperation from the United States.

Diplomats said that Assad has already received billions of dollars in pledges of aid from Saudi Arabia and Kuwait as a reward for sending 15,000 troops to fight in the war with Iraq.

Whether that alliance can continue in time of peace is open to question. Diplomats noted that Assad’s enthusiasm for the coalition was largely confined to the goal of defeating Hussein. Syria’s official television network showed only two snippets of film of Syrian troops at war, one diplomat said: the initial deployment and an officer raising the flag over a reopened Syrian Embassy in Kuwait.

Until recently, a senior U.S. official noted, talks such as the Baker-Assad session would have been nearly impossible. “U.S.-Syrian relations were adversarial,” he said.

But since the Gulf War, relations between Washington and Damascus have warmed rapidly. Officials on both sides say they have used their wartime alliance to try to smooth over a decade of bitterness.

The State Department still lists Syria as a terrorist nation because Assad allows groups suspected of terrorism to operate from here.

For example, the group believed to have planted a bomb aboard Pan Am Flight 103, which exploded over Lockerbie, Scotland, in December, 1988--the Popular Front for the Liberation of Palestine-General Command--maintains a headquarters here. But the Syrian government asked the group’s leader, Ahmed Jibril, to take a low profile about the same time as its relations with the United States were warming, a diplomat said.

Baker came to Damascus from Jerusalem on Wednesday morning and began his day in the Syrian capital with a tour of the city’s ancient bazaar and the centuries-old Omayyad Mosque.

He is scheduled to fly to Moscow today for talks with Soviet President Mikhail S. Gorbachev on both the Middle East and U.S.-Soviet relations.