Baker Hints of Interim Aid Plan for Israel : Housing: Short-term assistance might be offered in exchange for acceptance of a delay in a $10-billion package of loan guarantees.

The White House expressed confidence Monday that, despite an outcry from Jerusalem, the prospects now appear favorable that the United States and Israel will resolve a potentially explosive dispute over new housing loans.

“We think there’s still a good chance we can work this out,” spokesman Marlin Fitzwater said. “They want the loan guarantees and they want the peace process--both are in their interests.”

The statement of assurance came as Secretary of State James A. Baker III hinted that the Bush Administration might offer Israel modest, short-term assistance in exchange for its acquiescence to a proposed delay in the $10-billion package of loan guarantees that it is seeking.

Baker said that he and Israeli Prime Minister Yitzhak Shamir have conducted “substantial discussions” by telephone, attempting to resolve the timing of the loan guarantees “in a manner which will permit us to avoid conflict.”

But Baker refused to elaborate on what such a compromise might entail. In Israel, Shamir opened a bitter assault against the White House position, stating bluntly on behalf of his government that it was one “we don’t accept.”

Israel has asked the Administration to guarantee $10 billion in loans that it would obtain from other lenders to finance construction of housing for an influx of immigrants, primarily Soviet Jews. There would be no cost to U.S. taxpayers unless Israel defaulted on the loans.

President Bush had said last week that a postponement until the end of the year would “give peace a chance” by delaying debate that might complicate the quest for a Middle East peace accord.

But in a radio interview, Shamir warned that Israel might yet refuse to participate in peace talks. He insisted that the United States was “obliged from a moral point of view” to provide immediate assistance.

In a briefing for reporters, Fitzwater declined to elaborate on the reasons for the apparent optimism in the Administration that some way might be found to ease the confrontation. Fitzwater and a State Department spokesman said they were “not aware” of any compromise plan that might be presented to Israel.

But persistent reports circulated Monday among diplomats and other knowledgeable sources that Baker was prepared to offer Israel a “bridge loan” that might permit it to continue to build new housing for Soviet emigres even while the $10-billion package is stalled.

One senior Administration official said that such a plan had not yet been circulated in the government. But before Baker hinted at such a compromise in a news conference in Mexico City, the official noted that the secretary’s penchant for closely held diplomacy left open the prospect for such an initiative. “With Jim Baker,” the official said, “anything’s possible.”

Other ranking officials pointed to a so-far muted reaction from Congress as a further reason that the Administration remains hopeful that its call for postponement of the Israeli aid might yet succeed, despite the depth of support for Israel on Capitol Hill.

Some congressional backers of Israel have made clear that they will fight to see the loan guarantees approved without delay. But House and Senate leaders have not yet made their positions known, a silence the Administration hopes will mark a willingness to avoid confrontation. “I think we’re kind of in that phase where we want to discuss it, and Congress is willing to listen to what we have to say,” Fitzwater told reporters.

He said that over the weekend, Bush phoned the four ranking congressional leaders to make his case for delay while Baker, Deputy Secretary of State Lawrence S. Eagleburger and National Security Adviser Brent Scowcroft launched their lobbying efforts to forestall a congressional fight.

Times staff writers Marjorie Miller in Mexico City and Michael Ross in Washington contributed to this article.