French. Egyptian Officials Agree to Give Step-by-step Approach Another Chance but to Press For-genev

French and Egyptian officials today agreed to give U.S. Secretary of State Henry A, Kissinger’s “step by step” approach to a Middle East settlement another chance but to press for the renewal of the Geneva conference before the end of the year.

The Egyptian and French Ministers for Foreign Affairs, Ismail Fahmy and Jean Sauvagnargues, who met this morning at the Quai d’Orsay also prepared draft texts on Franco-Egyptian economic cooperation. These drafts will be presented to the two President, Egypt’s Anwar Sadat and France’s Valery Giscard d’Estaing, when they meet here this afternoon for their second and last “tete a tete” meeting, Sadat who arrived in Paris yesterday for a three-day official visit, will return to Cairo tomorrow afternoon.

The two President are expected to discuss this afternoon French economic investments in Egypt, France Egyptian technical and economic cooperation and detailed plans for the sale of French planes and other types of military equipment to Egypt, Among the hardware mentioned by Egyptian circles here are Midrange F-1 planes, helicopters, tanks, missiles, radars, communication equipment and various other types of electronic installations According to some sources, Egypt is expected to buy up to 120 Mir age fighter bombers.

Sadat visited the “Thomson CSF” works this morning where ultra-sophisticated electronic equipment is produced, He spent two hours examining modern radars and component parts for the ground-to-air “Crotale” missile. Sadat was accompanied by a large suite of Egyptian officer and War Ministry officials Including the minister in charge of military Industries.

WIDE RANGE OF TOPICS DISCUSSED

The question of French arms tales to Egypt was one of the subjects Sadat and Giscard d’Estaing discussed yesterday afternoon during I heir two-hour meeting at the Elysee Palace.

Other subjects they discussed included “the political situation In the Middle East,” The two Presidents reportedly agreed to give Kissinger’s step-by-step approach another chance. They also reportedly agreed, however, on the necessity to reconvene the Geneva conference before the end of the year.

The European-Arab dialogue, which was postponed after a number of European countries mainly West Germany, Holland and Britain opposed France’s request to have the Palestine Liberation Organization present, was also discussed, Sadat and Giscard d’Estaing reportedly agreed yesterday to hold the conference with the Palestinians participating only in committee work and not In the plenary assembly.

France will have to convince its west European partners to accept this solution and Egypt will do the same with Yasir Arafat, The two Presidents agreed to use all their influence to convene such a parley at the earliest moment.

FRANCE’S POSITION HIGHLIGHTED

French sources say that Giscard d’Estaing stressed during the meeting the need for Egypt to use all Its political Influence and prestige to obtain pledges from the oil-producing countries that France will not be affected by another oil embargo. He also demanded, and reportedly obtained, a promise from Sadat that Egypt will use, all of its influence to keep French territory free from renewed terrorist attacks.

During the state banquet last night, at which Sadat and were wife were guests of honor Giscard d’Estaing offered a toast in which he said that a Mideast settlement involves the recovery of Arab territories occupied by Israel and “the right” of Palestinians “to have a land of their own.” He also stressed as one of the possible settlement terms Israel’s “right to live like all the states of the region, In sure, recognized and effectively guaranteed frontiers.”

Diplomatic observers in Paris stressed these two points In the President’s speech. They underlined that he used the word “settlement” and not “peace,” thus trying to Imply that an effective settlement could be provided by an Arab-Israel non-belligerence treaty. Giscard d’Estaing also mentioned the need for “effective guarantees” which could be provided by the superpowers and the UN Security Council’s permanent members.

A joint French Egyptian communique is expected to be Issued tomorrow at the conclusion of talks between the two Presidents. Sadat has also scheduled a press conference for tomorrow In which he Is expected to disclose whether an agreement has been reached to sell Mirages to Egypt. A French presidential spokesman said today that Giscard d’Estaing had accepted an invitation to visit Egypt at a date to be set later.