Prospects for peace in Central America have risen dramatically in recent days. The White House announced a new peace proposal that carried with it the endorsement of the Democratic leadership in Congress. In Guatemala City, the presidents of five Central American nations signed a peace agreement crafted by President Arias of Costa Rica. Peace is not yet at hand, but a promising start has been made.

The two key countries -- the United States and Nicaragua -- made critical concessions. The United States expressed willingness to reach agreement with the Sandinista regime. Washington continues properly to insist that Managua open its political system and respect the rights of its citizens, but no longer is demanding that the Sandinistas dismantle their government. In signing the Arias pact, Nicaragua bound itself to democratic reform, accepting a commitment to lift restrictions on freedom of expression and association and to hold free elections on a regular basis.

To keep the search for peace on track and to protect hemispheric security in any final agreement, the United States must take four concrete steps:

1. We should unequivocally accept the Arias plan as the framework for negotiations. That plan bears the signatures of all five Central American leaders. It has a claim to international standing and legitimacy that the unilateral U.S. proposal cannot match. Moreover, the United States should defer to the Central American countries in their effort to find peace. Such deference is consistent with longstanding U.S. policy, reaffirmed last week by Secretary of State George Shultz when he endorsed "regional discussions designed to find an agreement."

2. The United States must become constructively engaged in the search for peace. For example, it should work with the Central American and Contadora states to strengthen procedures for monitoring and verifying compliance with a future treaty. We should also resume direct talks with the Sandinista leaders in Nicaragua to make certain they fully understand our concerns and intentions and to demonstrate that we are willing to abide by a regionally negotiated peace agreement, if they are as well. Our involvement in these ways would facilitate critical decisions by our allies by reassuring them of our commitment to a negotiated settlement. It might also help reassure the contras that their interests will not be abandoned.

3. As negotiations proceed within the Arias framework, the United States should make sure that key security issues are given proper attention. The Arias plan, as it now stands, does not offer sufficient guarantees against Nicaragua's becoming a platform for Soviet or Cuban power, and hence a threat to the hemisphere's security. Accordingly, the United States must make clear to Moscow and Havana, as well as Managua, that we will not tolerate Soviet-bloc troops or bases in Nicaragua and that we will use force if necessary to prevent their establishment or to have them removed. We should also make plain that U.S. troops would be ready to repel an attack by Nicaragua against any of its neighbors.

The Sandinistas must commit themselves to the security provisions of the draft Contadora treaty. These provisions, to which they have already agreed in principle, require Nicaragua and other Central American countries to reduce the size of their armed forces, limit their arms acquisitions, remove foreign military advisers and end any support to insurgents elsewhere. There can be no lasting peace in Central America if the security concerns of the United States and all countries in the region are not satisfied.

4) The United States should start working with countries of the region and with European and Latin American allies to implement a strategy for the long-term development of Central America. It will take a Herculean effort for the region to recover from prolonged war, to resume economic growth, to improve social equity and, most important, to strengthen democratic politics. A steadfast American commitment, with appropriate resources, is essential to achieving these goals -- which, in turn, will provide the best insurance against future communist intrusion in Central America. The writer is a former ambassador to the Organization of American States and a negotiator of the Panama Canal treaties.