PLO Clears the Way for Peace Talks Role : Mideast: But group still insists on a halt to Jewish settlements and right to seek Palestinian homeland.

The Palestine Liberation Organization cleared the way early today for possible Palestinian participation in a Middle East peace conference, issuing a “positive” response but insisting on a halt to Jewish settlements and the right to represent Palestinians in their search for a permanent homeland.

Near the end of a bitterly divisive, five-day session of the PLO’s parliament-in-exile, the carefully worded statement of the Palestine National Council stopped short of formally agreeing to attend a U.S.-brokered conference. But the statement also did not attach immutable conditions to Palestinian participation--an attempt to open the door to the peace conference while continuing to seek additional guarantees, said PLO officials.

“We haven’t impeded the peace efforts, and we haven’t gone against the initiative” of the proposed peace conference’s sponsors--President Bush and Soviet President Mikhail S. Gorbachev--said PLO Chairman Yasser Arafat.

“But will there be a single standard for international legality?” he demanded after the 256-68 vote that “welcomes” the peace conference.

Arafat said the PLO continues to reject Israeli conditions imposed on the peace process and warned: “We are raising our hands to make the peace of brave people, not surrender.”

While PLO hard-liners insisted that there will be no Palestinian participation without further, firm guarantees, the moderates who ultimately carried the day said the PLO leadership has been left with enough flexibility to negotiate a satisfactory avenue to send a Palestinian delegation.

“We have witnessed a very clear test, and in essence 79% of the constituency voted yes to the operation by saying that the PLO welcomes (the U.S.) initiative and the peace conference but sets down recommendations for entering it,” said Nabil Shaath, an executive committee member who headed the team that drafted the final resolution.

Bassam abu Sharif, Arafat’s senior political adviser, told reporters Friday: “I don’t see myself an obstacle big enough to prevent the Palestinians from participating in the peace process.”

The statement was clearly a razor-thin middle course that attempts to balance what Arafat has characterized as a choice “between suicide and suicide.”

Not going to the conference risks leaving the Palestinians out of what may be their last chance to resurrect something of a homeland. Endorsing the conference carries the danger of forfeiting the PLO’s very existence as the sole representative of the Palestinians--and carries the worse possibility of providing cover for an Arab-Israeli peace that excludes any meaningful gains for the Palestinians.

In essence, the PLO appears to be resigned to moving forward with the peace process because there is no alternative, hoping to win more concessions along the way to lift the Palestinians out of the diplomatic rut they sank into after the PLO’s disastrous support of Iraq during the Gulf War.

Among the principles the PLO said it would consider as a basis for the success of a peace conference are: a halt to Jewish settlement-building before the conference begins; the right of the PLO to name a Palestinian delegation from both inside and outside the occupied West Bank and Gaza Strip; and negotiating the status of Jerusalem, annexed by Israel shortly after the 1967 Arab-Israeli War, as an “indivisible” part of the occupied territories.

The PLO said the peace talks should be conducted on the principle of exchanging land for peace, recognizing the “national rights” of the Palestinian people and incorporating a total withdrawal of Israeli forces from the occupied territories.

The delicately worded statement attempts to capitalize on some assurances presented to the Palestinians in recent weeks by Secretary of State James A. Baker III, including statements that the United States considers settlement-building illegal and regards the final status of Jerusalem as open to negotiations.

PLO hard-liners fought against acceptance of the peace conference during closed-door meetings all week. “Do we participate in a peace conference led by America, which killed the Iraqi people and works to liquidate Palestine?” demanded one delegate, Nassif Awad.

At the last minute, as delegates raised their hands in favor of the resolution, Sheik Assad Tamimi, a bearded, white-robed leader of the Muslim fundamentalist group Islamic Jihad, stood and began shouting, waving at members to put their hands back down.

George Habash, head of the radical Popular Front for the Liberation of Palestine, said his faction will consider withdrawing from the PLO executive committee if the Palestinians send a delegation to the peace conference. “Palestinian participation will not come as easily as Baker thinks,” he warned. “More than 60% of our people (in the occupied territories) are against the peace process. . . .”

The PLO position is sure to garner strong opposition among the Israelis, who have opposed any role in the peace conference for the PLO, which they consider a terrorist organization. Israel has said flatly it will not negotiate with residents of East Jerusalem, give up East Jerusalem or accept an independent Palestinian state on its borders.

Israel is also likely to be set against a variety of long-term aims set out by the PLO for negotiation in the peace conference, including the right of Palestinian refugees to return to Israel or be compensated for their property and the demand that Palestinians secure sovereignty over land, water and political, social and economic affairs during any interim period of autonomy.

Baker has suggested a five-year transitional period of autonomy for the Palestinians, with negotiations for the final status of the occupied territories to be opened after three years. In its communique, the PLO said it hopes to obtain “protection of the Palestinian people” during this interim phase, a provision that some PLO officials have interpreted to mean U.N. or U.S. and Soviet military observers. Israel would undoubtedly oppose such a move.

Under the resolution, the final decision on whether to formally join the conference will be left to the PLO’s 60-member Central Council “in the light of national interests,” with day-to-day negotiations undertaken by the 15-member executive committee.