Israel, PLO Said to Be Discussing Palestinian Rule

In an effort to break the stalemate in the Middle East peace talks, Israel was reported Monday to be deep in negotiations with the Palestine Liberation Organization over terms for Palestinian self-government.

Hanan Ashrawi, the spokeswoman for the Palestinian delegation to the peace talks, confirmed that PLO and Israeli representatives have met directly a number of times in an effort to break the deadlock in the formal negotiations and to explore other issues.

In Tunis, PLO Chairman Yasser Arafat said that PLO and Israeli representatives met twice in Washington last month in an unsuccessful attempt to reach agreement on the scope of Palestinian autonomy and on the status of Jerusalem, two crucial issues.

A spokesman for Prime Minister Yitzhak Rabin denied there had been such negotiations, emphasizing the word negotiations , after a report in Haaretz, the country’s leading newspaper, that Israeli “emissaries” had met with the PLO leadership on the authority of a senior Cabinet member.

Foreign Minister Shimon Peres left deliberately ambiguous the question of whether there had been “contacts” with the PLO leadership, only emphasizing that all official negotiations took place within the framework of the continuing Arab-Israeli peace conference under U.S. sponsorship.

In the Knesset, Israel’s Parliament, members from the governing Labor Party suggested that the party, not the government itself, is conducting the talks, but they confirmed that Rabin, as the party leader, had agreed to the talks out of his mounting frustration with the slow-moving negotiations and the Palestinians’ cumbersome decision-making process.

“Rabin has deniability because all he said (was) ‘Let them try,’ ” a Labor member of the Knesset said. “The reality, however, is that he wanted another channel, a back channel. He watches every move that is made, keeps track of every word that is said and is using these contacts to gain some leverage, that of recognition, over (the PLO leadership in) Tunis.”

In related developments:

* Palestinian negotiators gave Dennis Ross, the U.S. coordinator for the Middle East talks, a new proposal on Jerusalem’s status during the period of autonomy, perhaps the most sensitive issue in the current discussions. Ross, winding up a week of shuttle diplomacy in the Middle East, will present it today to Rabin and then meet the Palestinians again in an effort to end the stalemate.

* In the Jordanian capital, Amman, PLO and Jordanian officials took an initial step toward the eventual confederation of a Palestinian state with the kingdom by establishing six committees that will help the Palestinians prepare for autonomy and later coordinate activities between their two governments.

* Anticipating the failure of negotiations on Palestinian self-government because of such intractable problems as Jerusalem’s status, Israel’s former chief of military intelligence, Shlomo Gazit, proposed a plan--the first detailed scenario--for establishing a Palestinian mini-state in the occupied Gaza Strip and then dealing with the more complex issues in the West Bank.

Long rumored in political circles, Israel’s secret contacts with the PLO were described by Haaretz as very promising although they had not yet brought agreement.

“If these contacts bear fruit, this will be a bombshell,” Haaretz quoted a “senior political source,” presumably a Cabinet member or top Labor Party official, as saying. “The public will be astonished when things become clear.”

Palestinian delegates who have just returned from the last round of the peace talks in Washington said that Israel’s willingness to negotiate with the PLO was itself “very significant” and moved Israel closer to accepting the group as a partner in the talks.

Israel has long shunned the PLO, denouncing it as a terrorist organization dedicated to the destruction of the Jewish state and excluding it from all negotiations. Since October, 1991, however, Israel has been negotiating peace with Palestinians from the occupied West Bank and Gaza Strip on self-government, and they, in turn, have coordinated their position with the PLO, putting Israel into indirect negotiations with the group.

In January, Israel signaled its readiness to broaden the dialogue when the Knesset, at the government’s request, repealed a ban on private contacts with the group.

Sentiment has been growing in the Rabin government for some months for direct negotiations with the PLO in the belief that the PLO must make the key decisions on Palestinian autonomy in order for them to be accepted in the occupied West Bank and Gaza Strip.

By the count of one Labor Party member of Parliament, a majority of Rabin’s Cabinet--11 ministers in all--favor direct negotiations with the PLO, and only Rabin’s refusal to break publicly with past policy is holding them up.

Eliahu Ben-Elissar, a Knesset member from the opposition Likud Party and Israel’s first ambassador to Egypt, commented: “It is already not a question if (Israel will speak with the PLO), it is almost a question of when. . . . A pro-PLO coalition is being created in the Knesset.”

Arafat said the PLO is ready for further discussions, and he renewed his appeal for direct participation by PLO officials in the talks with Israel on Palestinian autonomy.

“It is time to review the question of the Palestinian representation at the negotiations,” Arafat told Reuters news agency. “I have appealed for a meeting (with Rabin) to make an honorable peace.”

Nabil Shaath, a senior political adviser to Arafat and the PLO’s behind-the-scenes coordinator at the talks, said by telephone from Cairo that there had been a number of meetings but, like Ashrawi, he declined to provide details.

“I cannot say when or where they took place nor reveal the names of the personalities involved in it,” Shaath said. “ . . . I do not want to embarrass those involved on behalf of Israel.”

In Washington, Israeli Ambassador Itamar Rabinovitch said he attended a fund-raising picnic in suburban Virginia recently with Shaath. But Rabinovitch, who doubles as Israel’s chief delegate in talks with Syria, insisted that there have been no direct contacts with the PLO.

At the same time, Rabinovitch said Israel is becoming increasingly concerned about the glacial pace of the 20-month-old Middle East peace talks. He said it is important for the bargainers to record their “first concrete achievement” sometime soon just to keep the chances for peace alive.

“We would like to step up the pace,” Rabinovitch said.

Although Rabinovitch did not say how Israel hoped to get the talks off dead center, he acknowledged that the key negotiating track is the one with the Palestinians. He speculated that Syrian President Hafez Assad, who does not seem to be in any hurry to complete a peace agreement with Israel, would prefer to see Israel and the Palestinians reach agreement before completing the Israel-Syria talks. Jordan’s King Hussein said earlier that Israel and Jordan were close to agreement but would not finish up until Israel and the Palestinians showed progress.

Rabinovitch, who holds a doctorate from UCLA, was interviewed by The Times on the eve of his departure for Los Angeles, where he is scheduled to address the World Affairs Council and the national conference of the Hadassah organization later this week.