Egypt is trying hard to be optimistic about the chances for peace in the Middle East but the chance for renewal of direct Egyptian-Israeli negotiations, already slim, seems virtually nonexistent.
Taking their cue from President Anwar Sadat, Egyptian officials argue that the Palestinian raid on Israel and the Israeli invasion of South Lebanon show that peace is not only possible but imperative, and that it can only be achieved if the aspirations of the Palestinians are satisfied. They also say the impotence of Syria in the face of Israel's attack on the Palestinians shows the folly of the Arab rejectionists.
But the peace talks that began with such high hopes last year were already at a standstill, and there seems to be little chance that Egypt would agree to resume them as long as Israeli troops are in Lebanon.
It would take a series of events that are viewed here as unlikely - prompt Security Council agreement on a peacekeeping force for the border area, Israeli acceptance, quick deployment and some breakthrough in Prime Minister Menachem Begin's talk with President Carter this week - even to get the peace negotiations back to where they were when Sadat pulled out the Egyptian delegation in January.
Egypt has reacted coolly to calls from Jordan and North Yemen for an Arab summit conference that would attempt to restore the unity that was shattered by Sadat's peace initiative. But there is talk here, for the first time in months, of the possibility that Egypt may have to adopt some new approach to the other Arabs in an effort to end its isolation.
"If you ask me officially," said an Egyptian diplomat who has participated in the peace talks, "of course I'll say that we still want peace and are working on a declaration of principles and all that. But Sadat is now in avery difficult position. He'll have to move closer to the other Arabs."
In a possible indication that such a reassessment may be in the making, Foreign Minister Mohammed kamel met yesterday with Said Kamal, deputy chief of the political department of the Palestine Liberation Organization, to discuss how to proceed in the face of the Israel's invasion. Egypt had virtually written off the PLO as an Arab partner after the PLO joined the rejectionists in opposing Sadat's initiative and Palestinians murdered a prominent Egyptian editor during a conference on Cyprus.
An oddly cynical view of the week's events that is held by some Egyptians is that Israel and the PLO, by design or otherwise, got what they both wanted - at least a temporary halt in negotiating process that was not leading to peace on their terms.
"The Israelis were really cornered before the PLO raid," an Egyptian diplomat said. "The Carter administration was really taking a hard position."
"But the PLO played right into Begin's hands with that raid. It restored all the credit he had lost since Jerusalem. But then the Israelis retaliated. There was very strong sentiment here for dropping the Palestinians and making our own peace with Israel but it would be very hard to do that now" he said.
According to an official on Sadat's staff, however, the lesson to be learned from this is that "the PLO doesn't want peace and Israel doesn't want peace and they will get what they want if the rest of us dance to their music. Are we going to let them get away with that?"
He said that "this proves the necessity of going ahead with the peace process. The Syrians didn't make a move this time, but what about next time? They could drag everybody in with them. We have to get the peace process going."
Whatever their view of how Sadat ought to proceed now, the Egyptians seem convinced that Israel's move into south Lebanon only proves the expansionist proclivities of the Jewish state and shows that the Begin government, far from preparing to yield the Arab territories occupied in 1967, is bent on acquiring more.
Under those circumstances, officials here say, there is no basis for returning to direct peace negotiations, which means that once again Egypt is looking to the United States for pressure on Israel to change its ways.