Madrid, Day 2: The Gloves Come Off : Diplomacy: The rhetoric is bitter as the Israelis and their Arab adversaries speak. Each carefully avoids listening to the other.

Israeli Prime Minister Yitzhak Shamir, never before known as a patron of the arts, seemed to be seized Thursday by an overwhelming desire to study the Giaquinto fresco on the ceiling of the magnificent Hall of Columns in Spain’s 18th-Century Royal Palace.

The reason: Lebanese Foreign Minister Faris Bouez was complaining about all the Soviet Jews who are settling on Arab land. For Shamir, as for the other chief delegates attending the Middle East peace conference, the most pressing concern seemed to be finding something neutral to look at when he heard something he didn’t like.

With the cameras of worldwide television panning the room, it wouldn’t do to doze or read a newspaper. And across the table from Shamir, no matter where his eye might fall, there were the bitter adversaries of decades of hostility. It was hard not to look, but no one apparently wanted to stare.

Delegates sometimes looked at their fingertips or at the table or at the floor. But mostly, they looked at the speaker, their faces masks of passivity.

The Hall of Columns, which was once used by Spanish kings and queens to wash the feet of the poor in a pre-Easter rite, is a lot bigger than a suburban living room. But it is small enough to bring the men seated around the T-shaped table into an unaccustomed intimacy.

After a relatively noncontroversial opening Wednesday, the U.S.-Soviet-brokered conference got down to the raw meat of animosity Thursday. A day before, all the countries represented in the speeches were at peace with both Israel and its Arab neighbors.

But on Thursday, the Israelis and their Arab neighbors held the floor. The rhetoric was bitter, reflecting the technical state of war that still exists.

Shamir had probably never before been present for a speech by Syrian Foreign Minister Farouk Shareh. And he certainly was not used to sitting quietly while a speaker like Shareh proclaimed: “The list of inhumane Israeli practices is long and well-documented.”

And Shareh and the other Arab leaders at the table were unaccustomed to hearing Shamir intone, in person: “We are the only people who have lived in the Land of Israel without interruption for nearly 4,000 years; we are the only people, except for a short crusader kingdom, who have had independent sovereignty in this land. . . . We are the only people whose sacred places are only in the Land of Israel.”

But no one walked out. To do so would have risked taking the world’s blame for the failure of the peace process. So they all stayed. And tried to look impassive but not distracted.

The U.S., Soviet and Spanish team that planned the conference scheduled half-hour breaks between each speech.

Except when Secretary of State James A. Baker III forgot the procedure and called for Jordan’s Foreign Minister Kamel abu Jaber to follow Shamir immediately, the delegations, after each speech, filed out of the conference meeting room, which, like the rest of the Royal Palace, is a treasure of 18th-Century art and architecture.

This provided ample opportunity for informal chatting among the delegates. They made very little use of it.

For the most part, the delegations kept to themselves, making very few attempts to contact the men--and the very few women--who have come to personify years of antagonism and hostility.

There were exceptions. Eli Rubenstein, Israel’s hard-line Cabinet secretary, and Haidar Abdel-Shafi, chief of the Palestinian delegation, engaged in a very public handshake before Abdel-Shafi’s speech. Rubenstein also pumped the hands of several other Palestinians.

Earlier, Israel’s deputy foreign minister, Benjamin Netanyahu, approached Egyptian Foreign Minister Amir Moussa, and the two shook hands vigorously.

Handshakes have become fraught with symbolism at this conference since Shareh announced that he would refuse to shake the “guilty” hands of Israeli delegates.

The Syrian foreign minister has been as good as his word. To avoid casual contact, he and other Syrian delegates usually hang back to allow the Israelis to leave the room, which besides its fresco by Corrado Giaquinto that covers most of the ceiling, is adorned with five 370-year-old tapestries based on paintings by Raphael that reach almost from floor to ceiling.

Applause following the speeches has also followed national lines. One or two members of the Israeli delegation applauded listlessly at the end of Arab speeches. No Arabs were seen clapping when Shamir finished.