Israel, PLO Step Up Talks on Final Plans : Mideast: Both sides hope to accelerate negotiations on complete West Bank autonomy and other issues.

With the Gaza Strip and the West Bank town of Jericho now under Palestinian rule, Israel and the PLO are planning to accelerate negotiations both on autonomy for the whole West Bank and on final relations between Israel and the Palestinians, sources close to the negotiations said Thursday.

Israeli Foreign Minister Shimon Peres and Palestine Liberation Organization Chairman Yasser Arafat agreed in talks that ended early Thursday in Oslo on immediate discussions on assumption by the new Palestinian Authority of responsibility for health, education, welfare and tourism and the local taxes needed to support these services throughout the West Bank.

“It was a discussion about the future agenda . . . and an agenda was agreed upon,” Peres said as he left Oslo for Paris.

Israel and the PLO must also agree on the structure and powers of the Palestinian Council that will become the government for the Gaza Strip and the West Bank and set the date and rules for what will be the Palestinians’ first national election.

The election is tentatively planned for mid-October.

The most contentious element in this set of accelerated negotiations will undoubtedly be talks on what is termed the “permanent settlement”--a topic that includes Palestinian independence, borders, Jewish settlers on the West Bank and Gaza Strip, Palestinian refugees and the future of Jerusalem.

“Although we could put off those talks (on a permanent settlement) for two years, the present sentiment is to press ahead now and maintain the momentum,” a senior Israeli politician said Thursday. “We may not advertise this, but both sides are resolved to do it.”

One factor, other Israeli sources said, is Prime Minister Yitzhak Rabin’s determination to achieve a comprehensive settlement with Israel’s Arab neighbors--Syria, Jordan and Lebanon as well as the Palestinians--before the country’s next parliamentary elections, due in June, 1996, but already looming on the political horizon here.

Arafat also has important political considerations, starting with the need to demonstrate that the Gaza-Jericho agreement will lead, and quickly, to a full resolution of the Palestinian problem and is not, as his critics have charged, a partial deal that prolongs the problem, perhaps indefinitely.

For this reason, the original declaration of principles signed by Israel and the PLO in September and the agreement on Israel’s military withdrawal from Gaza and Jericho signed this month called for establishment of a popularly elected Palestinian Council and for partial Palestinian assumption of government responsibility on the West Bank even before then.

“People have to feel the changes in their lives, and on the West Bank, not only in Gaza and Jericho,” a Palestinian negotiator said. “To the extent we can bring forward our assumption of power and then broaden it, we can have that impact.”

In implementing the interim agreement, the Palestinians also anticipate difficulties--such as the Jewish settlements on the West Bank and Gaza Strip--that can be dealt with only in the framework of negotiations on the final stage. (The accord is scheduled to run for five years.)

The original approach of a step-by-step progression according to an agreed timetable gave way to what one Palestinian negotiator called “permanent engagement.”

“The theory was breakthrough, implement and then consolidate before moving on,” he said. “In practice, we found the negotiations were far more complex than we expected and that, as a result, we were continually engaged. We had serious, prolonged breakdowns in the negotiations, to be sure, and that convinced most of us that it is better to keep moving.”

Peres and Arafat also agreed in Oslo to assess the economic situation in the Gaza Strip and to approach the donors, notably the United States, Japan, Saudi Arabia, the European Union and the World Bank, that had promised millions of dollars to underwrite Palestinian self-rule over the next five years, but which have provided little of what they pledged last September.