Q: First, on the Sept. 1 peace plan, is it dead as people keep writing and saying outside of government?

A: I don't think so. It seems to me that the desire, the need for peace is not dead. It's very much alive. There's a yearning for it. Every event that happens only emphasizes its importance, and, if that's your premise, then somewhere along the line you have to find your way to the parties in the region sitting down together and talking about it. That's the essence of the president's plan, the essence of the Camp David Accords.

Within that framework you have to find your way to secure arrangements for Israel and some manner of recognizing the legitimate needs and aspirations of the Palestinian people. The president's plan does those things, and I think, therefore, that it must carry on. We expect to keep working on it.

Q: How do you get King Hussein to join in the talks, after he has said he can't?

A: Obviously, it isn't easy, and there are plenty of problems. However, I think that we'll continue to work at all aspects of the problems. It does seem to me that there's a certain shock that has taken hold, as I read the cables from the various Arab capitals, in which people are saying to themselves, "Are we really going to pass this up? Maybe we can't afford to do that." I think it's well for them to talk among themselves and see if they aren't missing the boat.

Q: Do you think that Hussein would have made the statement he made if the Israelis and Lebanese had been able to work out a plan, an agreement, for the evacuation of Israeli troops? Do you think Lebanon is one of the principal problems for Hussein?

A: It's hard to say. It's something that's really impossible to make a categorical statement about. But I do have the distinct feeling that King Hussein was ready to enter the peace process with the right kind of Palestinian delegation, and that at one point--the weekend before last I guess it was--he had the kind of arrangement with Mr. Arafat that would have permitted him to do that--permitted him in the sense that he wouldn't have been undercut by Palestinians or his fellow Arabs.

If that's the case, then he was ready to go under the conditions that existed then, but the PLO wouldn't accept that agreement, and that's what brought about these statements.

Q: What agreement do you mean, between the--

A: It can't be called an agreement because it didn't finally hold, but, as I understand it, King Hussein and Mr. Arafat worked out an understanding of conditions that were acceptable to King Hussein and seemed to be reasonable, whereby King Hussein would enter the peace process or make a statement that he was ready to do that, and that he would have a Palestinian delegation that consisted of legitimate Palestinian people who could claim to be genuinely representative, but who were not members of the PLO.

Q: It was reported in The Wall Street Journal--Karen House's article--that President Reagan had assured the king that he wouldn't press him to join the talks until the Israelis had agreed to freeze the settlements. Is that the case, and is that still part of the problem if it is?

A: I don't think it was part of the problem of the king's announcement, because in the president's Sept. 1 speech he said that it was his view that there should be a freeze on settlement activity. We have consistently continued to emphasize the importance of that because, after all, you're talking about a negotiation dealing with an area, and, if the area is being changed while you are in the process of negotiating or considering negotiating, it's tough to make that negotiation as meaningful as it otherwise might be.

The president has always had that position. What he said to King Hussein was that he would continue to advocate that position, but if the king announces his readiness to enter the peace process, then we would press harder on the settlement activity. We'd have something to press with, so to speak, when you say to the Israelis, "Why don't you slow down or freeze the settlement activity so that we can have another Arab leader at the bargaining table." They say, "Well, show me one."

If we were able to have his commitment, then it might be more reasonable to talk about this matter, and more effective. The king was told that we wouldn't press him to enter negotiations until something had been obtained. He might have decided to enter and make that his first point of discussion.

King Hussein was assured basically that the president would continue to maintain the position in the Sept. 1 initiative, and we have told everybody that continuously--every Arab government that has tried to change the president's position, and, for that matter, Israeli questions about it. The president has maintained a steadfast position there, and fundamentally that's what he assured King Hussein he would do.

But I think there is a distinction here between a situation where there is no expressed willingness on the part of King Hussein or other Arab leaders to enter the peace process while there is still settlement activity, and a different situation where King Hussein says, "I'm ready to sit down and negotiate about these, and I've committed myself to do that, but before I actually sit down, I think there ought to be some action on this." Those are two different situations.

What the president said was, "If you enter the negotiation, say you're ready to enter the negotiation, I will not press you to actually sit down at the bargaining table unless we can find some form of freeze."

Of course, King Hussein might decide to sit down anyway and say, "The first thing I want to talk about is a settlement freeze." But we haven't got to that point.

Q: Is there anything that you expect you could get from the Israelis that King Hussein could in turn use to get the PLO back into this action in terms of either Lebanon or settlements?

A: I think the PLO people have to make up their own minds, and I don't think that we should be worrying about thinking of additional things to induce them to change their behavior. The president has put a very forthcoming and imaginative program on the table, which, when read with the full Camp David Accords, the processes and commitments in them, give, I should think, a great sense of hope to Palestinian people, particularly those living in the West Bank and Gaza Strip. So that's enough.

I think that particularly people who aspire to lead a group like the Palestinian people in the Middle East, and to represent the interests of those people as human beings, have to come forward at some stage of the game and influence their thinking.

Q: I believe you said at some point in your press conference that the PLO had forfeited its mandate to speak for the Palestinians. Who would be the Palestinians who could come forward in their place? Would they be West Bank Palestinians? How could that be brought about?

A: I've forgotten precisely what the words were that I used. I don't think I said "forfeited," but I did say if they are given leadership of a group and there's an opportunity for something constructive and they don't do it, it certainly calls into question whether or not they should continue to have that leadership.

I think that that's true. I used the words, "Use it or lose it." What other form of Palestinian representation there may be remains to be seen, but there are all sorts of possibilities.

Q: To bring in possibly West Bank officials or some other Palestinians, how would this be done or in what forum?

A: I have some ideas, but I think that it's critical to find the ideas that the Arabs will be comfortable with. Right now I think it's up to them to find those ideas, and to find a way into this peace process.

Q: If we could go back to Lebanon for a moment, what is possible in the way of assuring or reassuring the Israelis that the apparently strengthened Syrian forces will abide by any Israeli-Lebanese agreement for the evacuation of foreign troops from Lebanon? How do you see that playing out?

A: The Syrians have said consistently that they will withdraw as Israel withdraws, assuming that the government of Lebanon asks them to do so. I'm sure the government will ask them to do so.

They seem to have changed their pitch here in the last week or so. Maybe that represents a sense on their part that perhaps there will be an Israeli-Lebanese agreement and they'll then have their commitment called. But I think basically we are engaged in a process there where we first have to find the conditions under which Israel will withdraw, and I think those have to be conditions that are consistent with the sovereignty and dignity of Lebanon and provide adequate security for Israel so that we get genuine full withdrawal by Israel.

Once a satisfactory agreement is reached-- assuming that it will be reached, and I think that it's possible all right--then we have to say to the Syrians, "All right, the Israelis have agreed to withdraw, now it's up to you," and try to work out some sort of schedule.

Q: Do the Russians have to be brought back more into the diplomacy in the Middle East now, given that heavy involvement with the Syrians?

A: I think Syria is, I presume, a sovereign nation and can make up its mind what it is going to do. But, from our standpoint, I think the first thing is to work on an agreement between Israel and Lebanon, and then on the basis of that agreement, call upon Syria and the PLO and others who are there to withdraw from Lebanese territory and get on with the job of reconstruction of Lebanon and reconciliation of Lebanon. There are plenty of problems for Lebanon to face, and we want to be helpful to Lebanon in that regard.

Q: It is feasible to you, then, that the Israelis themselves would reach an agreement with the Lebanese without guarantees of the Syrians or, for that matter, the PLO abiding by its terms.

A: I think that the agreement between Lebanon and Israel will deal with the relationship between those countries and the security arrangements in southern Lebanon.

I am sure also that the Israelis will condition their withdrawal on the withdrawal of the other occupying forces. So there is that much of a connection there.

Q: Mr. Secretary, how would you characterize the state of our relations with the Israelis on these questions now? Are we pushing; do we need more leverage; are we in disagreement on, let us say, things beyond the settlements and in the evacuation talks themselves?

A: I think the basic fact that makes an agreement between Lebanon and Israel very likely and desirable for both parties is that they agree on the essential ingredients. That is, they both want a secure southern Lebanon. Neither wants to see PLO terrorist groups re-enter that country, and particularly that area. So it isn't as though they're at cross purposes. They have the same objective. That being the case, the construction of security arrangements is not a matter, you might say, of high principle or strategy or something like that. It's a question of working out in a kind of tactical way what those arrangements are, consistent with Lebanese sovereignty, and give assurance of security in the area. Both parties want it.

I think in that environment, we--and particularly in the person of Phil Habib and Morrie Draper--have been very helpful in trying to develop the modalities for that. As I have been talking with them and reviewing the situation regularly and talking with the Israelis and the Lebanese when they were here a few weeks ago, I think you can see a tremendous amount of accomplishment.

It isn't as though they're just at a dead end and haven't gotten anywhere. They have gotten a long distance but they haven't quite reached the end of the road.

Q: On the settlements, and the idea of the freeze on the settlements, there doesn't seem to be any progress from our point of view, does there, toward that?

A: I can't see any, no.

Q: What can we do to encourage progress, or what leverage do we have?

A: I continue to feel that the great leverage involved is the leverage of potential peace. I felt that all along, and I felt that for years as I visited around in the area. It was that magical possibility that turned people on so much when President Sadat made his bold move.

I think that is the basic ingredient and at the same time it's hard to exercise that ingredient until there is a visible willingness on the part of the Arab world personified by somebody, some country, to say I am ready to sit down and discuss peace with Israel.

King Hussein wants to do that. He has told us that, and he said so publicly. But he needs to have support in the Arab world to do so, and to do so effectively.

Q: How do you account for Mr. Arafat's apparent change of mind, the collapse of the arrangement between him and the king?

A: I read all sorts of things about the PLO, but I don't have an answer for that question. I could speculate about it, but it wouldn't be particularly useful.

The basic fact is that there was a very reasonable proposition in front of him that could and eventually will result in a better life for Palestinians. Somehow in the processes of the organization called the PLO, they were not able to affirm that proposition. It's too bad. Why, exactly, I don't know.

Q: Do you read the bombing of the embassy in Beirut as having had any impact on the larger policies in the area, in terms of this settlement?

A: If anything, it makes us more determined. I suppose it raises the consciousness of everybody about the genuine security concerns that you must have in that area, although I think the bombing of an embassy or a building somewhere is something that could happen anywhere in the world. We've had lots of bomb scares around buildings in San Francisco. Actual bombs go off in lots of buildings in this country. It's a tragic affair, and it highlights these concerns. When you talk about the president, I think it makes him even more determined to press on and try to bring about a more peaceful environment.

I do think that there will be a genuinely more peaceful environment in Lebanon when the foreign forces leave because there are elements in the forces in the Syrian sector, PLO and Iranian elements that are actively disrupting. When they leave the country, there will be a better control over the situation.

Q: Is it your analysis or understanding that the Iranian group that claimed responsibility for this was in fact the one who did it?

A: I am not aware that there is a smoking gun, so to speak, that has been identified. A group has claimed the credit, and the fact that they would use a word like that for that event is a commentary on them. But at any rate, there are various other bits and pieces of circumstanial evidence that point in that direction, but there is no real hard proof.

Q: Talk a bit, if you will, about how you hope to gin things up on your trip, get things

going again on the Sept. 1 peace

plan; what you hope to do.

A: I've been involved in lots of

negotiations over a period of time.

I just sort of get into them and try

to see what seems reasonable and

talk to people. That is about what

I will do.

First, our emphasis will be in

the trip on the Israeli-Lebanon ne gotiations in trying to get that set tled, or as close to settlement as

possible. Following that, of course,

to follow on, if we have the oppor tunity, to get the conditions for

Syria and PLO and other with drawals as well.

At the same time, we will be

working on the peace process but

starting with the Camp David

partners, so my first stop will be in

Cairo. We will talk with the Egyp tians, and we plan to have a meet ing there of the ambassadors from

the key countries involved. We'll

have a good amount of time with

them.

They're an extremely able

group, very well informed. I expect

to learn something from the dis cussions, and perhaps they'll all

learn something from the interac tion involved. Phil Habib will be

there and Morrie Draper as well.

We will sort of make our initial

plan and go on from there to Israel

and Lebanon.

I hope that as the time goes on I'll have an opportunity to visit Amman and Riyadh, but I think we have to concentrate first on--

Q:On this trip?10

A: We have to concentrate first on the Camp David partners and on the Israeli-Lebanon arena. Of course, that also leads to Syria. And if we have something to talk with Syria about, namely, an agreement between Israel and Lebanon for Israeli withdrawal--

Q:You would go to Syria?10

A: Then, we naturally want to take the next step and arrange for Syrian withdrawal. I think the way for me to think about this now is that I'm going to go to Cairo, and I'm going to talk to the Lebanese and the Israelis, and we are interested in the evacuation of Lebanon. And, of course, we're interested in the peace process, but we'll start that way and we'll see how it unfolds and try to do sensible things as we go along.

Q: Do you intend to go to Jordan, or is that also contingent?

A: I would certainly hope very much to have a chance to visit with King Hussein and King Fahd as well as Mr. Assad. But I think the priority has to be on getting the Lebanon situation straightened out.

Q: Are there any Palestinians, official or unofficial, leaders that you expect to be talking with?

A: No. I certainly have no plan to meet with anyone from the PLO, if that is what you're getting at.

Q: Informal meetings in the lobbies of hotels?

A:No meetings.

2 Q: May I just ask one last question? There is a view that the Israelis, by being difficult about withdrawing from Lebanon or taking time and making more settlements in the West Bank, can in fact prevent a peace plan that they find uncomfortable from getting anywhere. Do you have a thought about that?

A: I've heard that said a lot and read it in the papers. Against that you have to put the fact that a great deal of progress has been made in the negotiations with Lebanon. I personally have no doubt that the Israelis want to withdraw from Lebanon under the right circumstances. It's not that easy to find the right circumstances. It has certainly taken a lot longer than we expected or would like. But, nevertheless, I think that it's possible and do-able. That's one side of the equation.

On the settlements, I think it's a very important issue. It cuts in both directions. I know that the Israelis feel strongly that there was a time, before they were the occupying force, when the Jews were not welcomed to live in the West Bank, and so the settlements make a point.

I might note that in the president's plan it's very explicit that if the settlers want to stay in their settlement, they stay, but they would live under the jurisdiction of whatever is the jurisdiction of that territory. In the president's plan, it's perfectly consistent with Jews living in the West Bank.