Acting Prime Minister Simcha Erlich said Saudi Arabia's Middle East peace proposal, although unacceptable, is a turning point in Saudi-Israeli relations because it recognized Israel's right to exist, Israeli radio reported.
Standing in for the vacationing Prime Minister Menachem Begin, Erlich reiterated Israel's Sunday rejection of the eight-point peace plan, contending it could lead to destruction of the Jewish state, the radio said.
The Palestine Liberation Organization appeared divided over the proposal, with Fatah, the largest commando group and the one headed by PLO chief Yasser Arafat, welcoming the proposals and hard-line Palestinian groups rejecting it.
Meanwhile, President Anwar Sadat returned to Egypt from the the United States, and a high government official described his visit to Washington and London as "100 percent successful."
In another development, Palestinian guerrillas bombed Israeli diplomatic missions in Athens and Vienna and claimed responsibility for a weekend attack against an Israeli airlines office in Rome.
A 75-year-old woman living in a house adjoining the mission in Vienna was injured by the blast. The Athens bombing, which occurred shortly after midnight, slightly damaged the rear gate of the embassy compound.
A statement issued in Beirut by the May 15 Organization for the Liberation of Palestine claimed responsibility for the attacks.