Israel, Arabs Plead for Peace; Signs of Compromise Are Rare : Mideast: Agreement is reportedly reached to hold the face-to-face talks in Madrid. But Shamir will press immediately to move the bilateral discussions to the Middle East.

Israel and its Arab adversaries, laying out their terms for peace, collided wildly Thursday over the history of their bloody dispute, the blame for it and the very basis of the negotiations meant to bring it to an end.

Beyond unanimous appeals for an end to perpetual conflict, hints at compromise were tantalizingly rare on the second day of Madrid’s historic Middle East peace conference. The Palestinians reaffirmed their willingness to accept a period of self-rule before seeking nationhood; Jordan indicated a willingness to recognize Israel diplomatically; Israel pledged to stick with the peace process.

Indeed, the somber, all-day session marked the first time in memory that an Israeli leader made a speech and the Arabs didn’t walk out. Nor did Israeli Prime Minister Yitzhak Shamir walk out, not even when the Palestinian delegation chief quoted Yasser Arafat, chairman of the Palestine Liberation Organization--which Israel considers a terrorist group--and invoked resolutions of the PLO’s parliament-in-exile.

This conference has already outlasted the last full-fledged effort at a regional peace--the 1973 Geneva conference that broke up in anger and indecision after only one day.

Yet the fact that the talks are continuing--the first round is to end today, and one-on-one talks between Israel and its adversaries, which had seemed in jeopardy, are expected to begin in two or three days--is about the most positive thing that can be said about them.

Those bilateral talks, which seemed for most of the day to be stymied in a dispute between Israel and its Arab neighbors over where they would be conducted, now are set to begin Sunday or Monday in Madrid, according to Israeli and American sources.

But, the sources said, Shamir will press immediately to move the talks to the Middle East, with Arab diplomats visiting Israel and Israelis traveling to Arab capitals.

Delegates from the conflicting parties--Israel, Syria, Lebanon, Jordan and the Palestinians--got their first chance Thursday to stake out their positions.

Spelling out long-held policies, they emphasized that the real action will begin only when Israel sits down in separate face-to-face talks with each of the Arab teams. It is there, State Department officials hope, that “mind-altering” experiences will clear the path to a resolution.

In the discussions Thursday, Israel and Syria appeared to set the outer limits of hard disagreement.

Shamir declared that focusing the talks primarily on territorial issues would present “the quickest way to an impasse.” Syrian Foreign Minister Farouk Shareh demanded the return of “every inch” of Israeli-occupied lands.

In a day that called up the wounds of decades of turbulence in the troubled region, Israel butted heads with the Arabs over who holds the strongest historical ties to the land of Palestine.

They even clashed over who has been history’s most hapless victim: the Jews, whom Shamir characterized as targets of years of persecution that culminated in the Holocaust; or the Arabs, who “paid the price,” in the words of Jordan’s foreign minister, when “the Nazis and others unleashed the passions of injured Zionism.”

Israel accused the Arabs of effectively calling for “the dismantling of the state of Israel.” Palestinian delegates said they were “dismayed” that the Israelis failed to talk about such key concerns as Jerusalem or Jewish settlement building in occupied lands.

At the conclusion of the confrontational day, a Syrian spokesman admitted that there is not a single point of convergence between Syria and Israel as they prepare to go into their first-ever direct negotiations. “So far, there is nothing,” he said. “Until this moment, nothing.”

Shamir led off the session in the baroque Royal Palace, calling on Arab states to show “goodwill” and recognize Israel’s statehood.

“Show us and the world that you accept Israel’s existence,” he said while reading, as did all those who spoke, from a prepared text. “Demonstrate your readiness to accept Israel as a permanent entity in the region.”

Launching a salvo in the contest over who should be seen as most wounded, Shamir drew up a list of grievances that he described as including wars launched by Arabs, one-sided U.N. resolutions and Cold War intrigue.

“There have been attempts to rewrite this history, which depicts the Arabs as victims and Israel as the aggressor,” Shamir said, referring to the Nazi slaughter of Jews in World War II. “Like attempts to deny the Holocaust, they will fail.”

Shamir, who rarely looked up from his text to make eye contact with the delegates who were seated around the large, T-shaped table, attempted to shift the spotlight from the issue of land that Israel won in the 1967 Middle East War. “It will be regrettable if the talks focus primarily and exclusively on territory,” he warned. “It is the quickest way to an impasse.”

By comparing the large land mass inhabited by numerous Arab nations to the tiny Jewish state, he implied that Israel would not give away the conquered land, saying: “What we need first and foremost is the building of confidence, the removal of danger of confrontation and the development of relations in as many spheres as possible.”

He added, in a phrase Israeli analysts pointed to as a sign of willingness to deal seriously, that “we are committed to negotiating without interruption until an agreement is reached.” Analysts also noted that Shamir did not preclude talking about the land issue.

Shamir sought to take the historical high ground by arguing that Israel’s claim to statehood does not depend on recent events, the need for refuge from the Holocaust or international backing. Rather, he said, Jews staked their claim during 4,000 years of identification with the Holy Land.

But just as hard as Shamir tried to put the land issue in the background, Arab delegates sought to put it right up front.

“Israel is only interested in entering into negotiations on economic cooperation with the states of the region while perpetuating its occupation of Arab territories,” complained Syria’s Shareh.

The Palestinians, Jordan and Lebanon insisted that U.N. Resolutions 242 and 338 require Israel to give up occupied territories as part of a resolution to the conflict. Syria ratcheted up the debate a notch, insisting that the two U.N. resolutions embodied the spirit of compromise when they were adopted beginning in 1967.

“Hence, the implementation of these two resolutions should not be the subject of new bargaining during bilateral negotiations,” Shareh said. “Rather, they should be implemented in all their provisions and on all fronts. This means that every inch of Arab land occupied by the Israelis by war and force--the Golan, the West Bank, Jerusalem and the Gaza Strip--must be returned in their entirety to their legitimate owners.”

Israeli settlement building in the Israeli-occupied territories was not mentioned in Shamir’s address, but the Arabs picked at it repeatedly. The Palestinians, who insist that the occupied West Bank and Gaza Strip form the bounds of their proposed state, called directly for a halt to the settlement program, which has dotted the landscape with Israeli communities; Syria demanded the removal of existing settlements.

“Territory for peace is a travesty when territory for illegal settlement is official Israeli policy and practice,” said Haidar Abdel-Shafi, the elderly head of the Palestinian negotiating team.

The Palestinians complained that they came to the table only as part of the Jordanian delegation because Israel refused to deal directly with a Palestinian delegation or with Palestinians outside the occupied territories. In one of several references to the absent PLO, Abdel-Shafi declared: “We have been denied the right to publicly acknowledge our loyalty to our leadership and system of government. But allegiance and loyalty cannot be censored or severed.”

Abdel-Shafi, whose appeals directly to the Israeli people for peace appeared to gall Israel’s delegates even more than Syria’s customary dour attack, struck the pose of a victim. He called up a litany of alleged abuses committed by the Israelis against Palestinians under occupation.

As Shamir sat hunched forward at the table with his jaw set, Shafi said: “We have seen some of you at your best and at your worst, for the occupier can hide no secrets from the occupied, and we are witness to the toll that occupation has exacted from you and yours. . . . We have seen you look back in deepest sorrow at the tragedy of your past and look on in horror at the disfigurement of the victim turned oppressor.”

Lebanon, while insisting on a comprehensive resolution to the Arab-Israeli conflict, also cited its own special problem, the Israeli occupation of a self-declared security zone in south Lebanon. The occupation, its delegates said, could be resolved separately through implementation of U.N. Resolution 425, which calls for withdrawal of Israeli forces and assurance of Lebanon’s territorial sovereignty.

The Arabs seemed ready to embrace, with reservations, Secretary of State James A. Baker III’s proposal for a period of limited self-rule for the Palestinians, followed by negotiations on the final status of the West Bank and Gaza. It was on that one point that any semblance of convergence with the Israelis emerged.

Shamir declared that the goal of the talks must be to sign peace treaties with the Arab states and to reach agreement on “interim self-government arrangements” with the Palestinians. Abdel-Shafi said the Palestinians are prepared to accept such arrangements as long as they are not considered permanent and could be limited to a short period as a prelude to an independent homeland for the Palestinians.

Both the Israelis and the Arabs insisted that the time for bloodshed is past. They professed a sincere desire to let peace rule the Middle East of the future. But Syria and Jordan added qualifications. Jordan said it wants “peace with honor.” Syria’s Shareh issued a warning:

“Israel would be gravely mistaken were it to interpret this Arab response (to join the peace talks) as a license for it to perpetuate its intransigent stands within this conference or any of its committees. Our delegation has come carrying inexhaustible reserves of goodwill, a genuine, serious desire for a just peace and determination to help enable this peace process succeed and reach its noble objectives.

“That determination,” he added, “is only equaled by a no lesser determination to reject any attempt to exploit the current peace process to legitimize that which is illegitimate and unacceptable according to the United Nations . . . or to obtain any gains--however small--which would mirror the abhorrent injustice of aggression or which would reward the aggressor.”

At the end of the day, many of the Arabs had scant hope for the talks’ future, especially as they wrangled over a host of matters, including their desire to have the second round of negotiations in Madrid, not in the Mideast where they might have to go further than they seemed to be willing to go in recognizing Israel.

“I would hope that this is not the position we’ll be confronted with on the table because there’s no hope if it’s that way,” a Jordanian delegate said after Shamir’s speech. “I didn’t see any indication that Shamir’s government is willing to recognize the legitimate rights of the Palestinians. In that case, there is absolutely nothing to talk about.”

The Jordanian delegation’s official spokesman, Marwan Muasher, said Shamir’s address “indicates a very bad beginning for the process.”

But Kamel abu Jaber, Jordan’s foreign minister, cautioned against writing off the conference before it had really begun. “I look at it only as a first statement,” he said of Israel’s opening address. “This is positioning. We are all positioning.”

Today’s Events

The schedule for the third day of the conference :

8 a.m. Israeli Prime Minister Yitzhak Shamir.

8:15 a.m. Jordanian Foreign Minister Kamel abu Jaber.

8:30 a.m. Haidar Abdel-Shafi, head of the Palestinian side of the Palestinian-Jordanian delegation.

8:45 a.m. Lebanese Foreign Minister Faris Bouez.

9 a.m. Syrian Foreign Minister Farouk Shareh.

9:15 a.m. Egyptian Foreign Minister Amir Moussa.

9:30 a.m. Soviet Foreign Minister Boris D. Pankin.

10 a.m. U.S. Secretary of State James A. Baker III.

10:30 a.m. End of session.

There is no session scheduled on Saturday.

Peace Talks at a Glance

Here’s what happened Thursday concerning the Middle East peace conference in Madrid:

LAND DISPUTE: Prime Minister Yitzhak Shamir of Israel said land should not be the main target of negotiations, prompting an angry Arab reaction. Shamir also urged that the conference’s second phase--face-to-face talks between Israel and each Arab nations--take place in the Mideast after initially convening in Madrid.

END THE RADICALISM: Jordan’s foreign minister, Kamel abu Jaber, urged Israel to give up the occupied territories and the Arab states to end the radicalism that for decades has kept them from making peace with the Jewish state.

SELF-RULE: The chief Palestinian negotiator, Haidar Abdel-Shafi, formally accepted some period of limited Palestinian self-rule in the occupied West Bank and Gaza Strip but demanded an immediate stop to Jewish settlements to facilitate the peace process.

LEBANON TERRITORY: Lebanese Foreign Minister Faris Bouez, comparing the occupation of any of Lebanon’s land to the loss of “a vital limb,” invoked U.N. Resolution 425 in the renewed push by his government to get Israel out of a 400-square-mile strip along Israel’s northern border.

TOUGH TALK: Syria’s foreign minister, Farouk Shareh, delivered the harshest speech, demanding that Israel give up “every inch” of territory captured in the 1967 Mideast War.

‘Today It Was a . . . Garden of Thorns’

Voices from the second day of the Middle East peace conference.

“Several days ago I said the conference will not be a rose garden, but today it was a whole garden of thorns.”

--Israeli Prime Minister Yitzhak Shamir ‘Bleeding Forever’

“If Lebanon loses any of its areas, it would lose a vital limb. This would mean bleeding forever.”

--Lebanese Foreign Minister Faris Bouez ‘What . . . Are We Doing?’

“If we can’t talk about Jerusalem, if we can’t talk about withdrawal, what on Earth are we doing here?”

--Jordanian Foreign Minister Kamel abu Jaber ‘Return Every Inch’

“Every inch of Arab land occupied by the Israelis by war and force, the Golan, the West Bank, Jerusalem and the Gaza Strip, must be returned in their entirety to their legitimate owners.”

--Syrian Foreign Minister Farouk Shareh ‘The American Censors’

“The Americans are the organizers of this conference, but they are also its censors. There is no doubt the speeches passed under the hands of the Americans.”

--Haim Oron, Israeli opposition Parliament member ‘It’d Be Wonderful’

“Jews and Arabs at the same table. It’d be wonderful if something came of it.”

--A customer sipping coffee at a bar in Madrid