FRANKLY, WE DON'T KNOW whether Jimmy Carter will manage to 1) induce the Palestinian movement to accept the right as well as the fact of Israel's existence and 2) persuade Israel to accept the Palestinians as a negotiating partner and as a people also deserving a "homeland." The difficulties were immense and obvious even before Cyrus Vance went to the Mideast - so much so that many felt the best course was to duck the problem and look instead for more interim agreements. But the administration decided to bite the bullet. We commend them. The overriding need is to draw Israelis and Palestinians into mutual recognition. Either you try to solve a problem or you don't.

The administration evidently counts a "moderate" Arab states to help deliver the Palestine Liberation Organization, which, for all its failings, remains the only viable Palestinian organization; it is chiefly for the United States to deliver Israel. The moderates do seem to have made some progress. Whether they have made enough to win for the PLO, right now, either the start of a direct relationship with Washington or a seat at the peace table, is doubtful. The PLO, in the Arab fashion, still clings to the hope that by whispers and feints offered to the United States it can avoid coming face to face with the need to accept Israel. But at the least, the administration has given the PLO an opening. If the PLO clings to its fantasy of undoing Israel, then it risks losing the possible reality of a home of its own. It's an anguishing choice. No true friend of the Palestinians would spare them the need to make it.

The Israelis resist negotiating even with a PLO that might accept U.N. Resolutions 242 and 338. They reject the idea of a separate Palestinian entity. This brings Israel into sharp and painful collision with the United States. But, from the point of view of American interests, it is a necessary collision. The administration's judgment - we share it - is that the United States can best ensure the good relations it needs with Arabs, and can best honor the moral and political obligations it has freely incurred to Israelis, by promoting Israeli-Palestinian coexistence.

Tactics are always arguable. For instance, in February Mr. Vance said that the PLO must renounce its "covenant's" vow to erase Israel, and now he says acceptance of 242 "in my judgment would revoke the covenant." Our own view is that if the Palestinians find it impossible to compromise in practical diplomacy without abandoning their paper dreams, then let them make the compromise and let the Israelis seek substantial compensation for their anxiety in other coin - perhaps in extra security advantages. Differences of principle must find their treatment, and transformation, in negotiation. That is the way the United States is trying to go, and it is the right way.