Israel Foreign Minister Yigal Allon urged the European Economic Community today not to take a political stand on the Middle East conflict when the second general session of the European-Arab dialogue convenes in Tunisia later this week.

Allon asserted that the EEC-Arab talks to improve economic tise "might become a politically dangerous tool which would diminish, not enhance, the role of Europe in the Middle East."

Visiting Common Market headquarters to sign a $33 million financial aid agreement, Allon also met with French Foreign Minister Louis Guiringaud to patch up the French-Israeli quarrel that erupted after France released the alleged Palestinian Terrorist Abu Daoud.

Both ministers announced that diplomatic relations seemed "back to normal" now that Israel's ambassador to France, Mordecai Gazit, recalled after Abu Daoud's release, had returned to Paris. Allon said he would welcome Guiringaud when the French official comes to Israel next month.

The United States and Israel have expressed concern that the European-Arab relationship, although limited to trade, financial and technological cooperation, has begun to assume a political dimension that could affect prospects for an overall peace settlement in the Middle East.

The United States exerted diplomatic pressure to block a Common Market proposal endorsing an "urgent" return to the Geneva peace conference when Common Market political directors met in London on Jan. 31.

The 20-nation Arab Leagues has insisted that he European-Arab dialogue should open discussions that aim for common positions on the Middle East dispute.

Last November, the nine EEC countries, in a joint declaration at the United Nations, voiced their support for Palestinian rights "to effective expression of national identity that might include a territorial base in the framework of a negotiated settlement."

Arab states have been prodding the EEC to incorporate that view officially into the dialogue.

U.S. diplomats feared that a strong European stand now on the Geneva conference and Palestinian questions might prejudice U.S. Secretary of State Cyrus R. Vance's coming visit to the Middle East, according to British and French sources.

The European relented, and no substantive political declaration is expected to come out of this week's meeting in Tunis.

West German Foreign Minister Hans-Dietrich Genscher also spoke with Allon before leaving Brussels for Damascus to begin a tour of Arab capitals.

He assured Alloln that EEC-Arab relations had grown in importance primarily because Arab nations are now the Common Market's most important trade partner, absorbing 13 per cent of all EEC exports.

Genscher also told Allon that the EEC had no intention of playing any kind of political or mediatory role in the Middle East.