Diplomatic and Economic Setbacks Seen As Limiting Progress on Peace

American efforts to advance the Middle East peace process appear to have suffered because of diplomatic setbacks sustained by the Reagan administration and the uncertain economic situation in the United States, according to reports in the Israeli news media Monday.

Akiva Eldar, diplomatic correspondent of Haaretz, reported that Secretary of State George Shultz told Israeli leaders during his visit here a week ago that the administration has set far-reaching goals in the areas of foreign relations and the economy for its last 15 months in office.

Shultz said President Reagan ordered his advisers to come up with programs to refute the claim that his lame-duck administration will be impotent during its final year. These include a Middle East settlement, as well as attempts to resolve the situations in Afghanistan, the Persian Gulf and Central America.

CONCERN ABOUT STOCK MARKET

But, according to Haaretz, officials in Jerusalem believe the recent stock market crash reflects an acute crisis of confidence in the American economy. This, coupled with Shultz’s failure to arrange a Reagan-Gorbachev summit meeting and the difficulties encountered by Shultz in gaining agreement over Middle East peace talks, makes it unlikely that Reagan’s 15-month plan will achieve success, Haaretz reported.

At the same time, Foreign Ministry sources have expressed concern that a superpowers agreement would delay or sidetrack American peace efforts in the Middle East.

Laborite Minister-Without-Portfolio Ezer Weizman said Sunday that there is a new American-Israeli proposal for Middle East peace negotiations.

Speaking on the army radio, he implied it hinged on U.S.-Soviet co-sponsorship of Israeli-Arab peace talks as an alternative to an international peace conference under the auspices of the five permanent members of the United Nations Security Council. Since both formats would involve the Soviet Union, there is hardly any difference, Weizman maintained. Soviet officials appear to be giving some thought to Moscow’s involvement in the peace process. Yossi Beilin, political director-general of the Foreign Ministry heard from British Foreign Office sources that Soviet Deputy Foreign Minister Yuli Vorontsov spoke in London last week about various options for Palestinian representation at peace talks. Vorontsov also stated that the renewal of Soviet diplomatic relations with Israel is a stage in the comprehensive framework of the Middle East peace process, Haaretz reported.

Meanwhile Cabinet ministers are complaining that Premier Yitzhak Shamir and Foreign Minister Shimon Peres have failed to brief them on their talks with Shultz, Davar diplomatic correspondent Yossi Melman reported Monday.

“Cabinet ministers are frustrated,” Energy Minister Moshe Shahal was quoted as saying. “It is simply absurd that journalists receive a report on the content of the talks, government officials know, but only the Cabinet is not told. As ministers, legally we have joint responsibility for things we are not told about,” Shahal said. Several ministers are expected to raise the issue at the next Cabinet meeting.