THE WEEKEND death of 70-year-old King Hassan II of Morocco removes from the Middle East scene a figure who earned a reputation far beyond his region for moderation and reason. A longtime behind-the-scenes peace broker, he facilitated Arab-Israeli contacts at a time when the role was crucial to drawing other, more powerful Arab states into the diplomatic game. Crucial and not without risk: King Hassan tempted high personal danger for conducting a peace policy. His was an important contribution to regional stability and, not least, his ticket to the favor of Europe and the United States. There was good cause for President Clinton to attend his funeral yesterday.

It has to be said, however, that King Hassan was an old-fashioned constitutional monarch who held power tightly, sometimes abused it, and confined most of his reforming to the economic sector, where the first purpose was to keep Morocco in the minimally good graces of the international banks, public and private. It is shameful for a country professing modernizing proclivities to be entering the 21st century with an illiteracy rate of 50 percent or higher, as Morocco is. "At a time when the regime boasts of economic and political liberalization," reports Freedom House, "democracy remains a facade, an economic oligarchy increases its power, and the police and security forces continue to keep the population in check."

The United States and other foreign friends of Morocco, and of other similarly situated states across the crescent of Arab Islam, have tended to put the American interest in Middle East peace first and internal development second. The logic of that choice, never entirely convincing, may now be fading as the Arab-Israeli peace process takes deeper root. King Hassan's son, the quickly enthroned King Mohammed, 36, joins the new king of Jordan and others yet to come in the fraternity of "moderate" younger leaders of whom greater domestic change will now be expected. The West's gratitude for their past service as peace-seekers cannot dampen its abiding interest in their economic growth and especially in their prompt evolution into more open, humane and equitable societies.