Procedural Issues Still Have Power to Disrupt Talks : Diplomacy: Last-minute dispute over where and how to conduct the next negotiations frustrates Baker.

The final draft of Secretary of State James A. Baker III’s speech for Friday morning offered a straightforward, self-assured prediction for the next step in the U.S.-Soviet-sponsored Middle East peace talks here. “This weekend,” the text promised, “negotiations will begin.”

But by the time Baker began to speak at noon, events had forced him to change his text and lower his confidence level a notch. “This weekend,” Baker said, “negotiations should begin.”

What happened in between, U.S. and Arab officials say, was a long, stormy, unscheduled confrontation with Syrian Foreign Minister Farouk Shareh, who complained bitterly that the United States had rigged the peace conference to put his government on the defensive.

While the foreign ministers of the Soviet Union, Egypt, Lebanon and Jordan cooled their heels for two hours, Shareh argued with Baker in one of the lavish reception rooms of the Spanish Bourbons’ Royal Palace. Shareh said Syria might refuse to attend the most important part of the peace process, the direct one-on-one negotiations with Israel that were scheduled to begin Sunday.

“Where is the fairness here?” Shareh demanded heatedly, according to an Arab diplomat.

Shareh’s main complaint was that Baker had bent too far in Israel’s direction in emphasizing the importance of the one-on-one talks, the diplomat said.

Israel wants bilateral talks conducted in Jerusalem and in Arab capitals as a token of Arab recognition of its legitimacy. But Syria is willing to grant only a sliver of recognition and prefers the next round of talks to continue in Madrid. The Syrians also indicated they were extremely displeased by discussions over procedures rather than more substantive issues.

“It was pretty bare-knuckled,” a U.S. official said.

Baker himself expressed his unhappiness over the procedural wrangle.

“It would be very difficult to understand how a party could now refuse to attend bilateral negotiations simply because of a disagreement over the site of those negotiations,” Baker warned in his speech.

The acrimony carried even past the final gavel. At the session’s end, Soviet Foreign Minister Boris D. Pankin, who was presiding, announced: “The conference is adjourned.”

“Pending (its) reconvening by the parties,” Shareh added loudly from the table, putting another Syrian procedural demand into the record.

The daylong diplomatic cliffhanger came complete with inter-Arab arguments, a squabble within the Israeli delegation and intense U.S. efforts to hold the talks together. It was all confirmation, if any was needed, that many Arabs and Israelis were still caught in a dispiriting cycle of battling over procedural issues, instead of negotiating over issues at the roots of their conflict.

Indeed, the tangled argument looked much like Baker’s earlier eight months of shuttle diplomacy over conditions for a conference--only this time, the pain of failure for him would be even greater if the negotiations collapsed so soon after their start.

So, a new round of shuttle diplomacy ensued on the boulevards of Madrid. Baker summoned his two closest Arab allies here--Egyptian Foreign Minister Amir Moussa and Prince Bandar bin Sultan, Saudi Arabia’s ambassador to the United States--to his suite at the elegant Palace Hotel for a pep talk.

They then boarded limousines for a half-block ride across the tree-lined Paseo del Prado to the even more elegant Ritz Hotel, where Shareh had convened a meeting of Arab leaders.

With a phalanx of security men, both Spanish and Arab, barring entry to the hotel’s third floor, the Arabs met for three hours to try to reach a joint position.

By late Friday night, they appeared to have failed; Jordanian and Palestinian leaders said they were determined to go ahead with bilateral talks with Israel, but noted that they could not predict what their Syrian brethren would do.

One by one, Arab delegates flowed down the hotel’s grand stairway, offering varying and vague estimates of the situation.

Finally, when most of the dignitaries were gone, Zuhair Jenan, the portly, owlish spokesman for the Syrian delegation, appeared. Reporters thronged around, begging an authoritative explanation of the deadlock. Jenan’s reply was a study in the obscurantism of the sort that threatened to overwhelm the peace conference.

“It was agreed on the necessity of coordination and consultation,” he said sagely, “and tonight’s meeting was in that framework.”

As if not to be outdone, Israel’s delegation split into two factions, reflecting the strains in Prime Minister Yitzhak Shamir’s government between his own hard-line faction and the slightly more moderate followers of Foreign Minister David Levy.

Two top Levy aides, Eitan Ben-Tzur and Joseph Hadass, unexpectedly flew home after they lost out in a dispute over who would handle which bilateral talks, Israeli officials said.

As a result, the main portfolios in the negotiations were given to associates of Shamir and Defense Minister Moshe Arens--leaving the foreign minister virtually locked out of his country’s main diplomatic concern.