Egyptian Official, on Jerusalem Visit, Seeks Path to Israeli-Syrian Summit : Mideast: Foreign Minister Amir Moussa wins agreement to let exiled Palestinians participate in talks.

Seeking to energize the year-old Arab-Israeli peace talks, Egypt’s foreign minister met with Prime Minister Yitzhak Rabin on Thursday to discuss what it would take to get Rabin together with Syrian President Hafez Assad in a summit that would lay the basis for a broad Middle East peace.

Amir Moussa, who helped plan the late Egyptian President Anwar Sadat’s historic trip to Jerusalem 15 years ago, pronounced himself “optimistic” about the course of Arab-Israeli negotiations after meeting Rabin here. But he was more cautious about prospects for an immediate Syrian-Israeli summit.

“Israel is called upon to take certain steps, and the Arab side is also going to take certain steps,” Moussa said during a day of talks with Rabin and Foreign Minister Shimon Peres. “In fact, the Arab side has started by emphasizing the position of full peace for full return of the territories (occupied by Israel in the 1967 Mideast War) and recognition of Palestinian rights. The goodwill is there, and that is how we want to proceed.”

In a breakthrough symbolic in its importance, Moussa won Israeli agreement Thursday to allow exiled Palestinians to participate in regional talks, notably those on refugees and economic development. The discussions are part of the broader Arab-Israeli negotiations begun a year ago in Madrid.

“There is progress that has been achieved,” Moussa said after a second meeting Thursday with Rabin, “and we are looking forward to more consultations.”

The Israeli shift, the result of extensive diplomatic discussions in the past month, will bring Jerusalem into a closer dialogue with the Palestine Liberation Organization as well as with Syria, which has boycotted the regional talks while awaiting progress in the central peace negotiations.

Peres made clear the limits of the Israeli shift--the broadened Palestinian participation applied only to regional committees, not to the core talks where Israel is discussing autonomy for the West Bank and Gaza Strip.

He also said the delegates must not be members of the Palestine National Council, which serves as the Palestinian Parliament, and they may not come from East Jerusalem. Israel will withdraw from any discussion, such as in the refugee panel, where Palestinians raise the issue of a “right of return” to their former homes here.

“The agreement is that the Palestinians who participate in all the five committees can be from outside the (occupied) territories,” Peres said in announcing the new Israeli position.

Israel had refused to attend multilateral talks on refugee problems and economic development because of plans by exiled Palestinians to participate; it did agree to attend three other sessions on regional issues. The talks on economic development are scheduled for Oct. 29 in Paris, those on refugees for Nov. 11 in Ottawa.

Syria has boycotted all multilateral talks, maintaining that progress must be made in direct negotiations before it would join discussions of regional issues. The Syrian-backed Lebanese government also has boycotted these sessions.

Despite the clear limits in the Israeli shift, Egyptian officials said they felt that Moussa’s talks--two sessions with Rabin and two with Peres--had achieved significant progress in a dialogue that has grown fitful.

“These steps will help build confidence,” an Egyptian diplomat said, “and they have importance in themselves and because they are taken to help build confidence. The Israeli move, we believe, will be interpreted as an important signal in the Arab world. It means, after all, that Israel recognizes the Palestinian issue as larger than the future of the West Bank and the Gaza Strip.”

But Egyptian officials were cautious in assessing prospects for the Syrian-Israeli negotiations, where Moussa and other diplomats are seeking a major breakthrough that would bring a summit meeting between Rabin and Assad. “We are still some distance from one another both on fundamental concepts and on how to bridge those gaps,” another Egyptian official commented. “The progress here was more from the side than frontal, but it should help.”

Moussa, who has been working for a month to promote the Syrian-Israeli dialogue as the key to progress in the Middle East talks, reaffirmed at the outset the Arab viewpoint that peace in the Middle East must be based on trading the territory occupied by Israel for a “comprehensive” peace. “It means, as the Syrian foreign minister has said, all for all, a full withdrawal for full peace,” Moussa said.

Syrian Foreign Minister Farouk Shareh said last month that he was looking for a “total” peace for a “total” Israeli withdrawal. Israel has offered only a partial withdrawal from the Golan Heights it captured from Syria in 1967 and wants Damascus to define the nature of a future peace between them before discussing any return of land. Israel and Syria are scheduled to resume negotiations in Washington on Oct. 21.

Moussa, whose quickly arranged visit was only the second by a senior Egyptian minister to Israel in a decade, brought a message to Rabin from President Hosni Mubarak, who diplomats said is now personally involved in trying to broaden and accelerate the peace negotiations.