Israeli political leader Menachem Begin's [WORD ILLEGIBLE] representative, Schmuel [WORD ILLEGIBLE] to meet members of Congress [WORD ILLEGIBLE] American Jewish community [WORD ILLEGIBLE] sign of retreat yesterday [WORD ILLEGIBLE] probable next prime minister controversial views on the substance of a Middle East peace settlement.

Katz, a former member of the Israeli Knesset (parliament) and the likely chief of overseas information in a Begin-led government, suggested that Begin's positions might be subject to eventual compromise as a result of "face to face" negotiations with the Arabs. However, he also declined to say whether Begin considers the views to be negotiable.

Meeting reporters in a breakfast session sponsored by Foreign Policy magazine, Katz rejected an Israeli return to the pre-1967 borders, the creation of a Palestinian state on, the West Bank of the Jordan River or any negotiations with the Palestine Liberation Organization. At the same time, he said Begin is willing to negotiate with the Arab states "without preconditions."

The most controversial positions espoused by Begin since the election victory of this Likud Party are his claim of Israeli sovereignty over the West Bank and Gaza strip, which have been occupied by Israel since the 1967 war, and his declaration that many more Jewish settlements will be permitted in the predominately-Arab territory. Katz supported both of these positions yesterday.

The emissary, who expects to be in the United States for several weeks, said one of the reasons for his trip was "a sense of concern" that had been detected in the American Jewish community about the positions of Begin and the Likud Party.