Israelis Worried About Trend of U.S. Policy on Mideast Following Shultz Letter on U.S. Meetings with

The Reagan Administration’s ripple of interest in reviving the Middle East peace process through negotiations involving a joint Jordanian-Palestinian delegation, is creating waves in Israel.

Hardline Likud politicians and those further to the right were rumbling today about a possible “sell-out” by the Labor-Likud unity government in the wake of the Washington visit of Jordan’s King Hussein and Secretary of State George Shultz’s subsequent letter to Israel’s leaders lauding the King for his ostensible willingness to negotiate directly with Israel.

Shultz’s letter, the subject of a briefing by Premier Shimon Peres at yesterday’s Cabinet meeting, indicated that Washington is actively pursuing the idea of a conclave between U.S. officials and a Jordanian-Palestinian delegation prior to talks with Israel and that the delegation, as far as the U.S. is concerned, could include members of the Palestine National Council (PNC).

The shape of Reagan Administration Mideast policy which emerged from Shultz’s letter to Peres and Deputy Premier and Foreign Minister Yitzhak Shamir is worrying Israelis of all political hues, except the most dove-ish. (See analysis on Page 3.)

Shamir said, before his departure on a trip to Britain, France and Denmark yesterday, that the notion of including PNC members in a negotiating team was unacceptable to Israel and, until now, contrary to American policy toward the Palestine Liberation Organization. Israel regards the PNC as an integral part of the PLO, a view not shared in Washington.

Deputy Premier and Housing Minister David Levy, another power in Likud, called the American initiative “dangerous.” At a session of the Likud Knesset faction executive today, MK Yehoshua Matsa intimated that the unity government’s downfall was imminent as a consequence of the new American diplomacy and urged his party to bolster its ties with the religious parties which, while themselves a fragmented minority, hold the balance of power between the two major political blocs. Faction chairman Haim Kaufman assured him “it is being attended to.”

On the Labor side, dove-ish MK Ora Namir led the call for a warmly positive response to Shultz. But middle-of-the-road MKs such as Laborite Amnon Linn and Binyamin Ben-Eliezer of the Yahad Party which is allied with Labor, warned against the whole-sale abandonment by Israel of its long-standing policies toward the PLO. Israel’s policy is never, under any circumstances, negotiate with the terrorist organization.

Although the Labor-Likud partnership is showing strains, political observers believe that the core leaderships of both parties will avoid a coalition crisis at this stage. The American initiative, they point out, is still in the realm of the hypothetical. Israel has not been called upon by the U.S. to meet with or approve individual Palestinians as prospective members of a joint negotiating team, nor has the U.S. met with any.

Many analysts here believe Shultz is overly optimistic with respect to Hussein’s position and, certainly toward the likely response of PLO chief Yasir Arafat. While Shultz’s letter said that Hussein pledged a willingness to negotiate within the framework of United Nations Security Council resolutions 242 and 338, and that his position has been endorsed by the PLO leadership, Israeli analysts noted that the King was in fact vague in his public pronouncements in Washington and that the PLO so far has made no endorsement.

SHAMIR ATTACKS HUSSEIN-PLO ACCORD

Addressing a meeting of the British Herut in London last night — before the official start of his two-day visit as a guest of the British government — Shamir berated the February II agreement between Hussein and Arafat which Hussein cited in Washington as evidence of a willingness to negotiate. According to Shamir, this was an ill-disguised ploy to secure U.S. recognition of the PLO. He also criticized Hussein’s call for an international peace conference on the Middle East as an attempt to by-pass direct negotiations. Such a conference would be “a platform for extremism and propaganda, not for peace,” the Likud leader said.