Secretary of State Edmund S. Muskie warned yesterday that the United States will not allow the Palestine Liberation Organization to participate in the Mideast peace process until the PLO recognizes Israel's right to exist.

Muskie reiterated this longstanding U.S. policy in the wake of a statement by the nine-nation European Economic Community declaring that the PLO "will have to be associated" with any negotiations to resolve the Arab-Israeli conflict.

At a press conference dominated by questions about the action taken in Venice yesterday by America's West European allies, Muskie said he saw nothing in the EEC statement "which directly challenges the Camp David process" of U.S.-mediated Egyptian-Israeli negotiations on Palestinian autonomy.

"That being the case, I see no reason why we should not be able to proceed with it," he added. He also announced that the chief negotiators, Israeli Interior Minister Yosef Burg and Egyptian Foreign Minister Kamal Hasson Ali, will meet here July 2 and 3 with President Carter's special Mideast envoy, Sol M. Linowitz, in an attempt to get the stalled autonomy talks moving.

In the face of repeated questions about the PLO, the umbrella organization of Palestinian nationalist groups, Muskie insisted that U.S. policy is "clear-cut, longstanding and unchanged." Noting that the PLO is on record as being "interested only in Israel's extinction," he asked, "How then do you get them into a negotiation, one of whose principal aims is to ensure Israel's survival?"

"We are not trying to keep the PLO out of the talks," Muskie said. But "the ball is in the PLO's court" and he said that meant the PLO "must give up its commitment to the extinction of Israel before we would be involved with talks with them, and that's clear."

Several questioners, noting that the European call for a PLO role in the talks had used the deliberately vague term "associated," asked whether that implied a compromise with the allies under which the United States would permit some sort of indirect, advisory status for the PLO.

Spurring these questions was Muskie's comment that he could not pass judgment on the word "associated" because he had seen the text of the Venice resolution only a few minutes before the press conference began and would have to study the text further.

In response, Muskie said: "With respect to the word 'association,' any piece of paper that comes before me that affects any issue or policy, obviously I study it carefully . . . but I do not intend to signal, simply because I have said that of course we would study any word, that therefore I rule something in or out. That simply is an erroneous conclusion."

But, while his stance on the PLO seemed firm and unyielding, Muskie's overall replies to questions about the European initiative -- an issue that earlier had threatened a serious rift between the United States and the West Europeans -- represented an almost virtuoso performance of verbal broken-field running.

Confronted by a barrage of questions about whether the EEC resolution would hinder or help U.S-West European relations, Muskie kept responding, in tones of almost bland detachment, that the United States had no part in shaping the initiative, that he had not studied it carefully enough to comment in detail and that, at first glance, it did not appear to be at cross purposes with U.S. Mideast policy.

He even managed to slide easily around the differing U.S. and European attitudes toward the PLO by saying:

"The European community doesn't have to be as concerned with that question as we have to be, because we are involved in specific negotiations; they are not. They are talking about a broad framework of policy considerations toward which they would hope the parties would move."

But, while Muskie used a lot of words to say very little about the European resolution, the unspoken implication of his comments was that the Europeans had gone out of their way to avoid a fight with the United States and had come up with a document far less objectionable than U.S. policymakers originally feared would be the case.

Initially, the Europeans, concerned that lack of progress in the Camp David process would arouse anti-western sentiment in the Arab world, had talked about an initiative giving much stronger backing to the PLO. They also had considered putting the initiative in the form of a U.N. Security Council resolution -- a move that would have provoked a veto by the United States.

However, after strenuous American efforts to dissuade them from that course, the Europeans backed away to the point of finally settling for an EEC policy statement that couched its support of the PLO in fuzzy language and that paid homage to the necessity of pursuing the Camp David process.