Simple Recognition by Old Foes Is a Milestone : Mideast talks: By their presence at the table, Israelis and Palestinians tacitly concede legitimacy of each other.

There were no smiles, no breakthroughs, no professions of newfound brotherhood. Israeli Prime Minister Yitzhak Shamir looked almost pained, and Syrian Foreign Minister Farouk Shareh was professionally impassive.

But simply by sitting together at a single, 13-foot-wide table in Spain’s glittering Royal Palace on Wednesday, Israel and its Arab neighbors crossed an unmistakable watershed in the 43-year history of their intermittent war.

For the first time since Israel’s founding, all the parties to the conflict publicly accorded each other something they had long and stubbornly denied: simple recognition.

By sitting across a starched white tablecloth from Shamir, Syria’s Shareh reluctantly conceded that Israel is a legitimate state whose existence is a permanent fact of life.

And by suffering the presence at the table of seven Palestinians--including one who defiantly wore around his shoulders the black-and-white checkered kaffiyeh that has become an emblem of the Palestinians--Israel’s Shamir tacitly acknowledged that Palestinians constitute a nation with which he must negotiate.

To be sure, neither side seemed entirely comfortable with the moment that history--and the United States--had dealt it. There was remarkably little eye contact across the vast table as speaker after speaker rattled through a long afternoon; both Arabs and Israelis have perfected a technique of looking stolidly at the floor.

But neither did anyone walk out or even threaten to bolt. And both sides said they are still committed to starting direct, bilateral talks later this week, although they are still negotiating indirectly over the format and location of the talks.

“That old taboo that Arabs and Israelis cannot meet and cannot talk is now something that we want to relegate to history. . . ,” Secretary of State James A. Baker III said after the session, claiming victory for his eight-month diplomatic effort to launch the conference. “I hope we’ve put it to rest for good.”

Even Israel’s usually grim deputy foreign minister, Benjamin Netanyahu, allowed himself a rare burst of optimism. “Peace is at hand,” he proclaimed. “Direct negotiations . . . have been the traditional quest of Israel for the last 43 years, and we are hopeful that we are standing before such an achievement, perhaps in the very near future.”

Jordan’s foreign minister, Kamel abu Jaber, agreed, saying, “This is a new page. . . . What is past is past.”

Dore Gold, a defense analyst at Tel Aviv University and adviser to the Israeli delegation, observed that “there is an environment being created. There is a kind of interaction we’ve never had before. Israel Radio is interviewing Palestinians, Arab reporters are interviewing Israeli officials, all at the same place. That’s something new.”

Not everyone was so optimistic. Aides to Baker cautiously warned that it is too early to tell whether the “chemistry” they had hoped a conference would create has, indeed, materialized. And Israeli delegates were upset at the Arabs’ insistence on doling out their recognition of the Jewish state a drop at a time.

Behind the main procedural dispute--the question of where direct talks between Syria and Israel will be held--lay precisely the issue of recognition. Israel wants the talks to be held in the Middle East--preferably in both Israel and Syria--to make it clear that the two countries are normalizing their relationship. Syria wants the talks in Madrid, with U.S. participation, to leave the question of normalization open.

In contrast, some of the happiest people at the conference were the Palestinians, who formally were members of a joint delegation with Jordan but in fact were operating, for the first time in a major negotiating forum, as an independent force of their own--and thus winning a kind of recognition they have coveted for decades.

“We were at the center of this event,” crowed Faisal Husseini, chairman of the advisory group that is the Palestinians’ unspoken liaison to the Palestine Liberation Organization, whose formal presence was blocked by Israel. “We were not only a delegation--we were the delegation.

“It is our need now to show that we are independent,” he added.

That upset Israeli officials. “That’s bad,” spokesman Yossi Olmert said. “It has to be stopped. It’s leading in a bad direction.”

For Israel’s delegation, the achievement of the objective they have sought so long--the Arabs’ acknowledgment of their right to live in peace--brought little satisfaction, both because it was so grudging and because it came as part of a U.S. initiative that seems designed, in Shamir’s view, to force concessions from Israel.

Throughout the day, reporters and diplomats watched carefully to see whether any Arab officials would shake their Israeli neighbors’ hands--an act that became something of an acid test ever since Syria’s Shareh announced that he would refuse to do so without further Israeli concessions.

Thus, it was duly noted when Egyptian Foreign Minister Amir Moussa, whose country already has full (but chilly) relations with Israel, clasped Shamir in a businesslike grip.

And it created a minor sensation when Abdel Salam Majali, an adviser to Jordan’s King Hussein, grasped the proffered hand of Eliyakim Rubinstein, a close adviser to Shamir.

But not every encounter went so smoothly. At the end of the conference’s opening session, a hard-line member of the Israeli delegation, Sara Doron, impulsively introduced herself to the nearest Arab woman--a staff assistant to the Lebanese delegation.

Doron explained that she held out her hand and said: “I am a member of Parliament--are you?”

The Lebanese woman looked surprised.

“No,” she said, and walked away--leaving the Israeli with her hand dangling in the air.