MIDEAST PEACE PROCESS : Christopher Calls Arafat Key to Peace : Diplomacy: But Administration rules out pressing Israel to meet PLO chief’s conditions for resuming talks.

Secretary of State Warren Christopher on Tuesday described Yasser Arafat, the Palestine Liberation Organization chairman, as “the indispensable figure” in the Middle East peace process, but the Clinton Administration ruled out pressing Israel to meet Arafat’s conditions for resuming negotiations.

After an early morning telephone conversation with Arafat, Christopher acknowledged that the PLO is unwilling to return to the bargaining table unless Israel imposes more restrictions on militant Jewish settlers. The PLO demands the restrictions to ensure the safety of Palestinian civilians after Friday’s massacre of worshipers in a Hebron mosque by a settler armed with an assault rifle.

In separate appearances on Capitol Hill, Christopher and Robert H. Pelletreau, his department’s top Middle East expert, outlined an Administration strategy intended to cajole Arafat into accepting steps that the Israelis have already taken to detain some extremist Jewish leaders and disarm some of their followers.

But Christopher and Pelletreau made it clear that the Administration will not pressure Prime Minister Yitzhak Rabin’s government to do more.

Christopher told the House Appropriations Committee that Arafat told him the PLO “needs some time” to allow emotions ignited by the Hebron killings to subside before resuming peace talks. But Christopher said he is optimistic that the negotiations will resume in Washington, as President Clinton proposed after the massacre.

In an uncharacteristic rhetorical flourish, the usually bland Christopher said that the peace process cannot go ahead without Arafat’s participation. “He is the indispensable figure,” he said. “He is a political leader, but he is also the flag and ‘The Star-Spangled Banner’ all wrapped into one person.”

Israel and the PLO signed an agreement last September in Washington calling for limited Palestinian self-rule in the Gaza Strip and the West Bank town of Jericho. But many details were left to be sorted out by future negotiations.

U.S. officials said that Israeli and PLO bargainers had settled many issues before the Hebron killings. The Administration’s objective at this point is to prevent either side from reopening questions that have already been settled.

White House Press Secretary Dee Dee Myers said the PLO is expected to send an envoy to Washington later this week to try to get the talks back on track. But PLO sources in Tunis, Tunisia, said the Palestinian representative will not be ready to negotiate with the Israelis. Instead, he will try to persuade the Administration to press Israel to crack down on militant settlers.

State Department officials dismissed rumors that Clinton will invite Arafat and Rabin to meet in Washington. Rabin is already scheduled to visit the United States this month. “No thought is being given to inviting Arafat to come here,” the official said. “The focus right now is on bringing back the negotiators.”

On Sunday, the Israeli Cabinet ordered detention without trial for some extremist settlers--a punishment usually reserved for Palestinian militants. The government also said it will confiscate weapons from settlers who use them for anything other than self-defense.

Israel also indicated it will accept unarmed international observers, but it rejected outside forces to protect Palestinian civilians.

Arafat, who described the action as “hollow and superficial,” wants Israel to do much more: dismantle some settlements, especially in Hebron and the Gaza Strip; allow international peacekeepers throughout the occupied territories; disarm all settlers, and negotiate the future of settlements in the current talks instead of the next phase, at least two years away.

Pelletreau said the Israeli government’s actions are positive as long as they are rapidly and effectively carried out. He said the Israeli steps “must be seen as more than tokenism.”

But in response to questions from Rep. Lee H. Hamilton (D-Ind.), chairman of the House Foreign Affairs Committee, Pelletreau said the Administration does not support the Palestinians’ demands.

“How many people will the Israelis be disarming?” Hamilton asked.

“They have initially declared that they will put five people in administrative detention and they will be disarming others on an individual basis,” Pelletreau said.

“How many would you put in the militant settler category?” Hamilton asked.

“Several thousand,” Pelletreau said.

“Is it their intention to disarm all of those?” Hamilton said.

“I don’t believe it is their intention to disarm all of those, but it is their intention to take a series of measures with respect to the militant settlers that will greatly reduce the opportunities for confrontation and the possibility of violence,” Pelletreau said.

On a related issue, Pelletreau said the Administration “would certainly be willing to consider” an Israeli request for U.S. assistance to pay compensation to Jewish settlers who want to move from the West Bank or Gaza back to Israel proper. Polls show that many settlers would abandon the occupied territories if offered adequate compensation.