Andrew Young was, and remains, a faithful supporter of the administration's basic policy in the Middle East. He was forced to resign only because he was caught in an indiscretion at a time when Jimmy Carter needs to show he is a firm leader.

But sympathy for Mr. Young -- which I feel -- does not make the basic policy right. On the contrary, it is now more clear than ever that conditions in the Mideast and in this country make the administration's policy unworkable.

The basic Middle Eastern policy of the administration -- as Jimmy Carter, Cyrus Vance and Zbigniew Brzezinski have said over and over -- is to go for a comprehensive settlement of the dispute between Israel and the Arabs. That means affording full scope for the rights of the Palestinians. That in turn implies bringing their chief political force, the Palestine Liberation Organization, into the diplomatic process.

The Carter administration first tried to engage the PLO in the spring of 1977. Secretary Vance said the United States would recognize the organization if it acknowledged the right of Israel to exist, and accepted U.N. Resolution 242, which affirmed support for defensible Israeli borders.

The PLO refused. That whole episode was then overtaken by Anwar Sadat's visit to Jerusalem, and the Egyptian-Israeli peace treaty that followed.

A second effort to engage the PLO developed this spring and summer. A major public step occurred in May at the Vienna summit when Secretary Vance discussed with Chancellor Bruno Kreisky the visit to Austria of the PLO leader Yassir Arafat. In addition, there have been many private meetings, only some of which have come to the surface. Out of these sessions there developed a loose understanding.

Resolution 242, which mentions the Palestinians only as refugees, would be updated by another U.N. resolution asserting the rights of the Palestinian people. The United States would take a positive stance on that resolution. The PLO would then accept Resolution 242 as amended. The United States would recognize the PLO.

Those possibilities were mooted on Aug. 12. At a meeting in Damascus, the PLO's central commission refused to accept Resolution 242. It said it would reject any substitute that did not include something the United States opposes -- creation of a Palestinian state.

That absolutely crucial development was immediately eclipsed by the Young affair. In pursuit of the general administration policy, Young had made unauthorized contact with a PLO representative at the home of the Kuwaiti diplomat who was preparing the update of Resolution 242. The Israeli's learned of the meeting. When Young confirmed their information, they protested publicly. Jimmy Carter, in need of Jewish support for renomination and obliged to show that he is tough, decided to let Young go.

Taken in conjunction, the PLO decision and the Young affair show why the general constellation of events tilts strongly against an approach to the PLO at this time. For behind both developments lie complex sets of interconnected circumstances.

On the one hand, the Arab world is now dominated by the slow coming apart of the Khomeini government in Iran. The trouble there jeopardizes stability in neighboring Iraq. To protect himself, the Iraqi leader, Saddam Hussin, has instituted a kind of preemptive coup that has made for bad blood between his country and Syria. The weakening of the Iraqi-Syrian connection undermines the base of PLO strength, and the hold of radical Arabs on the states of Jordan, Kuwait and Saudi Arabia. Thus threatened, the PLO lacks the strength needed to show moderation. It is condemned to the hard line it took at the Damascus meeting.

On the other hand, President Carter now bleeds from a thousand wounds. That fact is well-known in Israel, where Prime Minister Menachem Begin is under pressure to stand up against any American demands for concessions to the Arab world, and particularly to the PLO, which Israelis see as a terrorist outfit. So the Begin government is bound to exploit whatever openings develop for holding off U.S. pressure.

Some, no doubt, will blame the government of Israel and those of us in the American-Jewish community for self-assertion against the general interest in peace. But the road to peace lies in patient and step-by-step follow-through in the negotiations now going on between Egypt and Israel. It does not lie in a policy unsustained by conditions in both this country and abroad. Such a policy can only lead to a dead end, a position of total American impotence.