Ambassador Andrew Young yesterday reversed his story about a recent meeting at the United Nations with a Palestine Liberation Organization representative, bringing a public rebuke to Young from Secretary of State Cyrus R. Vance and a diplomatic protest from Israel.
Young's turnabout, which followed a false version of the incident he told an assistant secretary of state last Saturday, generated renewed controversy about this country's most free-wheeling diplomat.
There was no immediate comment from President Carter about his friend and political ally. A White House spokesman said Carter's views were reflected in statements being made at the State Department.
The controversy arose from a July 26 meeting between Young and Zehdi Labib Terzi, the PLO observer at the United Nations. The meeting was at the home of Kuwait's U.N. ambassador, Abdala Yoccoub Bishara.
Monday, State Department spokesman Thomas Reston, on the basis of information provided Saturday by Young, said it had been "an accidental meeting" that developed without Young's foreknowledge and that nothing "which in any shape or fashion has anything to do with diplomacy was discussed."
Yesterday, Reston announced that Young knew that the PLO representative probably would be at the meeting and that the two men discussed postponing the U.N. Security Council vote on Palestinian issues then scheduled for the end of July.
Young "acted on his own initiative and without authorization" in his discussion with the PLO, according to a written State Department statement.
Reston said Vance had spoken to Young by telephone to express "displeasure" about the incident and the way it was handled. The disclosure of all this was made after Vance had consulted by telephone with Carter.
In July 1978, when Vance last reprimanded Young, about statements regarding Soviet dissidents and U.S. "political prisoners," the secretary of state let it be known that it had better not happen again.
State Department sources said Vance was clearly upset by the latest incident, especially because an untrue version was provided to a high department official and made public in the name of the department.
It was unclear last night, however, whether further disciplinary action will be taken or whether Young will remain in the government. The U.N. ambassador was reported to be relatively unconcerned, telling reporters in New York that "I didn't lie -- I didn't tell the whole truth." He also said, "I don't think you ought to be reprimanded for acting intelligently."
"I acted as an intelligent ambassador dealing with a difficult situation. I did what I thought was in the best interest of my country" as well as the best interest of Israel and the Arabs, Young said.
Israel, in a diplomatic protest, expressed "deep regret" at Young's meeting with the PLO official and said it was contrary to a US.-Israeli agreement regarding the Palestinian organization.
In 1975, Henry A. Kissinger, then secretary of state, supplied Israel with a written pledge that the United States will not "recognize or negotiate with" the PLO as long as that organization does not recognize Israel's right to exist and does not accept U.N. Security Council resolutsions 242 and 338, which establish the basic peace-for-withdrawal bargain of Middle East negotiations.
Although the literal limits of the agreement have been unclear, U.S. officials have said at times, as Reston did this week, that it bans "any substantive contact" with the PLO. Israel is greatly sensitive to any U.S. contacts with the PLO, and is particularly sensitive in the present climate of distrust and fear arising from the vital importance of Arab oil.
At the time of Young's meeting with Terzi, the United States was seeking to persuade the Arabs to postpone Security Council consideration of a new resolution on the Palestinian problem. The objective was to use the extra time to explore a compromise that could encourage Palestinian participation in the Camp David peace process.
High State Department officials spoke for a delay to Arab ambassadors at the United Nations, including Kuwait's Bishara. Young was involved in lobbying for a delay in the Palestinian debate, as it was, until Aug. 23. But State Department officials insisted they knew nothing until this week of Young's meeting with the PLO representative.
At the United Nations, an aide said Young had been told at the time by the Kuwait ambassador, a leader in the cause of a new Palestinian resolution, that he would not be able to put off the debate by himself. According to this account, the Kuwait ambassador suggested that Young come to his apartment to put the case to Erzi. Young apparently did so, although Terzi has continued to deny to reporters in New York that the two men have discussed substantive matters.
The first the State Department heard of the affair, by the official account, was a press inquiry last Saturday from Newsweek, which planned to include a reference to the meeting in this week's issue.
C. William Maynes, who is assistant secretary of state for international organization affairs and handles U.N. matters at the State Department, telephoned Young, who was in his hometown of New Orleans, to ask for a response to the Newsweek query.
According to State Department officials, Young provided Maynes with the account of the accidental meeting that was given to Newsweek last Saturday and made public at Reston's press briefing Monday. A brief report of the question and Young's response was cabled to Vance, who was in Quito, Ecuador.
Late Monday afternoon, several hours after Reston's press briefing, Young apparently was concerned about reports that Israeli officials did not believe the official story. On his own initiative, he called on Israeli U.N. Ambassador Yehuda Blum for about 90 minutes and reportedly told him what actually had happened at the meeting with the PLO representative.
The Israeli envoy communicated with Jerusalem, where the government decided to file an official protest.
When Vance arrived at the State Department early yesterday morning, he found a cable telling him that Israel was about to protest Young's meeting with the PLO. Vance called Young to find out what had happened and spoke to him about 8:45 a.m.
Vance then spoke to Carter before the State Department disclosed the amended version of the Young-Terzi meeting and Vance's reprimand.
"This development does not change our policy regarding the Palestine Liberation Organization and we have so informed the Israeli government. We regret that yesterday's (Monday's) statement was incorrect," the State Department announcement said.