The U.S. should acknowledge the Palestinians' right to self-determination.

Leaving aside Lebanon, it is no coincidence that the upsurge of terrorist acts directed against nationals of the United States, Israel and moderate Arab states has paralleled renewed efforts to reactivate the Arab-Israeli peace process. This is not new. Fifteen years ago, for example, the acceptance by Egypt, Jordan and Israel of an American negotiating proposal was followed by a spasm of violent acts, including the multiple hijacking of American commercial airliners to the Jordanian desert. To argue, therefore, that serious moves toward resolution of the Arab-Israeli conflict will end terrorism in the Middle East is to misread the lesson of history.

It would also be a misreading, however, to conclude that there is no link between terrorism and failure to move toward resolution of that conflict. To paraphrase the lexicon of the economists, progress toward a peace settlement between Israel and its Arab neighbors, including the Palestinian Arabs, remains a necessary, though not a sufficient, condition for ending the scourge of Middle East-based terrorism.

Secretary of State George Shultz is correct in saying that the murder of innocent civilians cannot be justified on grounds that the Palestinians have unrequited grievances. This should not, however, obscure the need to understand why young Palestinians commit such acts, to recognize that many of their grievances are valid and to go to the heart of what is needed to deal with them.

Four decades ago, the horrors of the Nazi holocaust awakened the world to the agony of Jewish grievances and helped mobilize support for the establishment of the state of Israel. The existence of deeply felt Jewish grievances did not justify terrorism in the name of Zionism, but neither did the violence of Jewish extremists make any less urgent the need to recognize the reality of those grievances and to seek to remedy them. It is not a justification of Palestinian terrorism to recognize that the Paltinreal, rooted in their experience of dispersion in the past four decades and occupation in the past two. During that time a sense of Palestinian nationalism has been forged that, in its extreme manifestations, has adopted terrorism as a weapon.

Most of the young Palestinians who carry out the brutal acts were born and brought up in refugee camps, in many cases the children of parents who were themselves refugees. They are full of hate toward those they hold responsible for their condition -- principally Israel and its main supporter, the United States. They are part of a lost generation for whom peace with its necessary compromises is unlikely to bring reconciliation. The question today is how to give the next generation of young Palestinians an alternative vision of their future.

At this point, some will undoubtedly say that none of the above is new and that the problem remains the disarray among the Palestinians themselves and their continued refusal to acknowledge the right of Israel to exist as a sovereign state in the Middle East. This is conventional wisdom, and it is true -- so far as it goes. But does it go far enough for today's circumstances? Is there not a growing risk that, while we stand on conventional wisdom, another opportunity to move toward peace will be lost and moderate leaders in the region will be one step closer to being swept away by extremist forces fundamentally opposed to Israel, to Arab-Israeli peace and to friendship with the United States? Has the time not come to inject a dose of unconventional wisdom into efforts to reactivate Mideast peace negotiations?

Those in the Middle East who want to pursue a peaceful settlement, including many Palestinians, are looking once again to the United States to be the catalyst, as it was on all previous occasions when the cycles of violence were broken, at least momentarily, and steps toward peace were taken -- in 1970 (ending the Egyptian-Israeli war of attrition), in 1973-74 (the disengagement agreements), in 1978 (Camp David), in 1979 (the Egyptian-Israeli peace treaty), and in 1982 (easing the final Israeli withdrawal from Sinai).

Today the United States is actively seeking to help Israel and Jordan and, through the latter, the Palestinians to find a formula for entering negotiations. President Reagan's proposal of Sept. 1, 1982, is still on the table. All of this is to the good. What is lacking is a rallying point for the moderates in the Arab world, and particularly among the Palestinians, to help them shake off the grip of extremists and rejectionists who have too long immobilized the Palestinian national movement.

An unconventional step of enormous symbolic and psychological importance -- not only to the Palestinians -- would be for the United States to acknowledge that the principle of self-determination applies to the Palestinian people. This would resolve a longstanding contradiction in our own position, since we otherwise recognize the universality of that principle. At the same time it would strengthen the hands of those in the Arab world who want peace and desperately want the United States to resume its leadership of the Middle East peace process.

It would be strongly criticized by Israel and by some in this country. We would need to do what we could in advance to explain our objectives -- for example, there won't be a negotiation unless a way is found to get the Palestinians to the table -- and to reassure critics about our motives. We would not need to accept the interpretation that self-determination can be exercised without regard for its effect on others or that it is automatically equated with an independent state -- an outcome Israel opposes and neighboring Arab states also do not view with enthusiasm. Nor should we play this bargaining chip for nothing. But we do need to put it on the table.

This move, conveyed at the highest political level, would send a badly needed signal that the United States has as great a sense of urgency about moving forward on the peace front as it has about confronting terrorism and teaching Libya's Muammar Qaddafi a lesson.