After weeks of protocol arguments about where they should meet, or if they would meet at all, French Foreign Minister Claude Cheysson met with Palestine Liberation Organization Chairman Yasser Arafat today on the neutral ground of the residence of Lebanese Prime Minister Shafiq Wazzan.

The meeting, which Arafat called "constructive," was set up shortly before Cheysson was to depart for Damascus on the last leg of his trip to Syria, Lebanon and Jordan to sound out their leaders about the moribund European peace initiative in the Middle East.

The meeting was held amid signs that Arafat's efforts to promote the PLO as a responsible -- and even moderate -- political factor in the Middle East was once again being challenged by radical Palestinian factions.

The recent upswing of Arab terrorist action in Europe -- the most recent incident was yesterday's attack on a Vienna synagogue -- are considered by Palestinian sources here to be a new effort to sabotage Arafat's efforts to move the PLO toward international acceptance by diplomacy rather than the gun.

The Cheysson-Arafat meeting was in keeping with Arafat's policy. However, for reasons that still are not clear but which Arab sources suspect are tied to the opposition that has grown in PLO ranks, Arafat had insisted that the meeting be held at his home in the West Beirut suburb of Sabra.

The French feared that a meeting at Arafat's home could be regarded as tantamount to granting official recognition to the PLO. The government of French President Francois Mitterrand has avoided this, choosing to call the PLO "a representative" of the Palestinians, not "the sole representative."

The French suggested that the meeting take place at the residence of French Ambassador Louis Dlamar, the site of Arafat's meeting with former French president Valery Giscard d'Estaing's foreign minister, Jean Sauvagnargues, in 1974.

Arafat, who had been ordered by the PLO executive committee to meet with Cheysson only on his own turf, refused, saying that the principle had already been established in 1980 when another Giscard envoy, Gabriel Robin, the head of the Foreign Ministry's poltical affairs division, went to Arafat's home.

PLO sources said that Arafat did not want to appear to have lost the diplomatic ground gained in 1980 by now going to meet the French on their own ground.

Early today, the compromise site was agreed to by Cheysson and Arafat, who clearly did not want to risk losing the chance to make his pitch to the new French foreign minister.

"We discussed the rights of the Palestinian people, all their rights, as people who are entitled to live like other people, other nations," Arafat told reporters as he emerged from the meeting this afternoon. "In principle I found a positive stand from him concerning the Palestinian issue, Palestinian rights."

Cheysson told reporters after the meeting that France has not changed its policy toward the PLO. He said that the PLO must be brought into the Middle East peace negotiations, but that until steps are taken toward Palestinian self-determination, it is not possible to view the PLO as the sole representative of the Palestinians.

Arab analysts here said Arafat's stance over the site of the meeting was at least in part the result of the pressures he is under from radical PLO elements and their Arab government sponsors who disagree with the cease-fire along Lebanon's border with Israel. Arafat committed the PLO to the cease-fire a month ago.

The cease-fire was opposed by some of the groups that make up the PLO and by outside sponsors such as President Hafez Assad of Syria.

Palestinians here say Assad was furious over the way Arafat negotiated the cease-fire on his own, and told Arafat so during a stormy meeting in Damascus early this month.

Some Arab sources say Assad's anger may have encouraged fringe radicals to engage in activities intended to discredit Arafat and bring him back in line. These sources note that Vienna police say one of the terrorists who attacked the synagogue yesterday identified himself as a member of Al Assifa, a breakaway Palestinian group led by Abu Nidal, who was expelled from the PLO in 1972 and since sentenced to death in absentia by the organization.

Until three years ago, Abu Nidal was operating out of Baghdad and was generally considered an instrument of the Iraqi secret police, operating often against such PLO moderates as Arafat. As part of Iraqi President Saddam Hussein's rapprochement with the PLO in the wake of the signing of the Camp David accords, Iraq expelled Abu Nidal.

His whereabouts since then have been hard to establish. He has been reported variously living in Libya or Syria.