Extremists May Peril Talks, Baker Says : Mideast: He warns of possible terrorism aimed at scuttling a regional peace conference.

Secretary of State James A. Baker III on Thursday warned all sides in the proposed Middle East peace conference that “rejectionists and extremists” are likely to take increasingly bold steps to scuttle the talks, which the Bush Administration hopes to open within three weeks.

“As we get closer to the end of October, you will see a tendency on the part of rejectionists and extremists across the region to take action designed to disrupt opportunities for peace,” Baker said.

He made his remarks--in response to questions by reporters about the seizure of Arab houses on Wednesday by Jewish militants in Jerusalem--as he greeted four Palestinian leaders at his State Department office. Although his comments were prompted by the incident in Jerusalem, Baker emphasized Thursday that his criticism was aimed at extremists on both sides of the Arab-Israeli dispute.

After Wednesday’s incident, Israeli police ordered the militants to vacate all but one of the seized houses in the Silwan neighborhood. Baker said he agrees with Israeli Prime Minister Yitzhak Shamir’s characterization of the takeover as “mistaken.”

Baker declined to spell out what other incidents he expects, but he said the United States has “highly classified information” pointing to possible terrorism.

President Bush and Soviet President Mikhail S. Gorbachev announced at their July summit that they hope to convene a Middle East peace conference, jointly sponsored by Washington and Moscow, before October ends.

Baker conferred with the Palestinian leaders to discuss Palestinian representation at the proposed conference, which he said is “the major issue that remains to be resolved.” Although one of the Palestinians, Hanan Ashrawi, said some progress has been made, the arcane decision-making process of the Palestinian community ruled out any chance of settling the matter Thursday.

Baker is to confer with Palestinian leaders again next Wednesday in Jerusalem after the four representatives who came to Washington have had a chance to talk to other Palestinians--presumably including top officials of the Palestine Liberation Organization.

Baker is to leave Saturday for his eighth trip to the Middle East since the end of the Gulf War. He plans to arrive Wednesday in Jerusalem after stops in Cairo, Amman, Jordan, and Damascus, Syria.

“This is the 10th of October, so we’ve got to see some decisions made across the region” if the conference is to get under way this month, Baker said.

Israel, Syria, Jordan, Egypt, Lebanon and the Saudi-led Gulf Cooperation Council have agreed in principle to attend the conference if the remaining procedural details are resolved to their satisfaction. But Palestinian representation remains unresolved, mainly because of Israel’s refusal to deal with the PLO, which Arab nations regard as the only legal representative of the Palestinian people.

In an apparent example of the kind of vicissitudes that will likely mark the diplomatic process as the deadline for the peace conference grows near, the New York Times reported that Syria has told the United States it does not intend to participate in negotiations with Israel over regional problems--one of three planned phases of the peace talks.

But a senior Administration official involved in the talks said that report is “just not true.” Asked if Syria is still committed to participating in all phases of the talks, the official said: “Yes, absolutely.”

Meanwhile, PLO Chairman Yasser Arafat called for a summit of Arab leaders to work out a unified position for the conference, the Associated Press reported.

Times staff writer Doyle McManus, in Washington, contributed to this report.