Beneath all the restrained optimism was an unmistakable note of urgency.

"This journey will have many obstacles," said Secretary of State George Shultz, toasting King Hussein of Jordan last night at the State Department, "but I am convinced the time is right for us both."

Responded Hussein, raising his glass to an absent President Reagan: "Conditions exist now that may not be with us for very long, and the challenge must be met."

So wound up the day which found the king at the White House telling Reagan that the Palestine Liberation Organization is ready to negotiate with Israel on conditions that recognize its right to exist with secure boundaries.

"We have discussed some of the thorniest issues that plague the Middle East," Shultz told his 200 black-tie guests in the Benjamin Franklin Room, "and we've seen progress."

Listening intently as Shultz talked was his dinner partner, the tall, slender former Washingtonian who became Queen Noor when she married Hussein. Her understated glamor was pointed up by a white gown cinched at the waist with a jeweled belt. Over it she wore a plain jacket. Shultz, the only man in the room wearing a white brocade dinner jacket, must have felt right at home.

At another table, across the room, was Hussein with Helena Shultz, she in pale pink. Elsewhere in the elegantly appointed hall that sparkled in the glow of crystal chandeliers were various members of Hussein's extended family as well as the former Lisa Halaby's.

Prince Abdullah Hussein, 23, who is the king's son by one of his earlier marriages, is finishing up a five-month course at Fort Knox, Ky. When he returns home, he will become a captain in the Jordanian army. During the evening, he kept up a running conversation with a former U.S. Army officer, U.N. Ambassador Vernon Walters.

"At the moment, I'm setting an example," Abdullah told another guest at the table. "I've been away at school ever since I was 7, so it's time the Jordanian people got to know me. And the army is the best way to do it. By me being in the army . . . "

"Tightens the bonds," Walters interjected, finishing the prince's sentence.

"Reassures them," the prince persisted. "When the king's son is in the army, well, it's been that way through the ages. It's not something new. Generally you do a hard day's work, and I think people appreciate it."

Would Abdullah ever be king?

"That's a very awkward question," Walters began.

"It's a very awkard question," the prince picked up. "Because it's really the most capable person at a given time.

"To find someone with the capabilities of my father is very hard. People like that come once in a century. I'm still a very young man, so it would be presumptous of me to . . . "

But would it be possible?

"Yes, it is possible," said the prince, whose uncle is generally thought to be next in line for the throne. "But it would just depend on the situation. Picking a leader is not something that should be done automatically because of a given position."

Earlier, Cabinet officers, members of Congress, and representatives of U.S. business sauntered onto the eighth-floor terrace overlooking the Potomac to sip their cocktails. Among them were CIA Director William Casey, Defense Secretary Caspar Weinberger, Commerce Secretary Malcolm Baldrige, Agriculture Secretary John Block, Sen. Paul Trible (R-Va.), Joint Chiefs of Staff Chairman John Vesey and international investor David Rockefeller.

American and Jordanian officials played off one another in assessing the day's talks.

"Very positive," said Jordanian Foreign Minister Tahere Masri, himself a Palestinian from the West Bank.

There are problems, however, and of these Masri singled out Hussein's proposal for a joint Jordanian-Palestinian delegation to negotiate with Israel. "We are still not in agreement about which Palestinians" should be included in the group, he said.

A State Department official called that "really a detail that needs to be worked out, not that it's unimportant. The important thing, though, is that the king talked about negotiations, U.N. resolutions 242 and 338, and he said all the right things.

"He said this was done in complete coordination with the PLO. He got the sanction he needed."

Another of the proposals put forth yesterday calls for an international conference that would give the Soviet Union a seat at the bargaining table.

"That's something we have some problems with, and has yet to be clarified," said a senior U.S. official.

Said national security adviser Robert McFarlane: "It's difficult to imagine a format that would facilitate progress. The Soviet Union's agenda is very different from ours."

The king's agenda is a little different than it started out to be, too. Hussein won't be going to California as earlier reported. "He never was very keen on that," a State Department official said, adding, "Kings have a way of concentrating on their schedules a little late."