Following are excerpts of the interview former presidents Jimmy Carter and Gerald R. Ford gave aboard Air Force One late Saturday on their return from the funeral of assassinated Egyptian President Anwar Sadat, starting with the prospects for peace in the Middle East and Sadat's isolation in the Arab world:

CARTER: I think if there was a mistake made in Camp David, it was not involving more deeply the Saudis and, at least, the Jordanians.

When we left Camp David, Sadat had an appointment that he and I had both made for him with Jordan's King Hussein in Morocco. And the pressure of the Arab world because they, in effect, had been excluded because of the secrecy of their negotiations, convinced Hussein to return to Amman instead of coming to Morocco.

Following that, Sadat became, in public at least, a pariah among the Arabs. But when I would meet with the Arab leaders, the Saudis in particular, they were hoping that this peace process would succeed. But it's almost impossible for an Arab to step forward because of a threat of assassination or violence within their own fragile government. They don't have the stability of a Sadat. Jordan has a weak nation. He Hussein is a weak leader. And the same with Syrian President Hafez Assad, who has a minority position in his own country. And, of course, the Saudi Arabians also have a fragile country with a tiny population, no great military strength and enormous wealth. So they don't have the courage of Sadat and they don't have the solid foundation that Sadat had of support by his people.

FORD: . . . I think you have to differentiate between the attitude of the radical Arabs on the one hand and the moderate Arabs on the other.

What the radical Arabs say and what they do from their national point of view at the present time, I think we can cast aside.

On the other hand, the moderate Arabs, the leaders and their people, especially when you talk to the leaders privately, they will tell you how hopeful they are that the peace process continue.

CARTER: That's right.

FORD: They cannot, or they have decided not, to support Camp David in a public way, but they do totally subscribe to a continuation of the process, which is what's happened for the last eight years.

They are as anxious as Sadat was for peace. For various internal reasons . . . within the Arab family of nations, they can't publicly come out and say what they tell me or tell President Carter or tell others.

I'm convinced that once the Camp David agreement is finalized with the actions that I hope and trust will be taken within the next few months, if the pressure is on from various sources, including the leadership of the United States, there can be another step that will appeal to the moderate Arab nations, Saudi Arabia, Jordan, some of the others.

On Mubarak

FORD: Egyptian President-designate Hosni Mubarak's position today is no weaker than Sadat's was when Sadat took over. As a matter of fact, Mubarak . . . has a head start. And from what I've heard him say and what I believe the plans are, the momentum is still there. And it's our responsibility as a nation, the United States, to continue our pressure in a responsible way to keep that momentum going.

CARTER: . . . And Jerry didn't go into this directly, but there's no doubt in my mind that Mubarak and Begin, with whom I had a long talk this morning, both are very eager for the United States to play a strong intermediary role between them, as a move to the culmination of the Camp David process.

On the Palestinians

CARTER: The other Arab leaders and the Israelis must recognize that there are three factors involved in any eventual permanent solution. One is to honor Palestinian rights. I personally do not favor a separate Palestinian state, but I see hundreds of thousands of Palestinians deprived of a home, deprived of a right to own property, deprived of a right to assemble, deprived of a right to free speech, deprived of a right to vote and living now for approaching a generation under a military rule.

This is not only contrary to established world custom, but it's also directly in violation of the heritage of Jews and it's anomalous in an Israeli nation. So there's a desire on the part of people like Dayan and others to terminate this anomalous circumstance and to give the Palestinians a right to self-government. And this is what Begin proposed in his so-called "full autonomy proposal."

Since it did not establish, however, or lead inevitably to a Palestinian state, the Palestinians, under the pressure of the PLO Palestine Liberation Organization and the Syrians, have refused to cooperate.

The greatest thing the Palestinians could do for themselves is for the Palestinian mayors to say, "We'll negotiate even this limited self-government or full autonomy," and then consolidate their position, run their own schools, run their own water supplies, run their own police force, build their own roads and so forth.

That's one vision that we had at Camp David which has not yet been realized, primarily because of the settlement policy on the part of Israel, the difficulty with East Jerusalem and the recalcitrance of the PLO and the Syrians to let the Palestinians come forward.

The other point, second point, I'm being too verbose, is on the Golan Heights. There has to be there a restoration of the international border, but with provision for Israel's security. And I don't have a formula for them. . . .

And the third thing, of course, is preeminent for Israel, and that is a guarantee that they will not be subject to successful attack from the Arab world.

I think the biggest single step toward that third thing is peace with Egypt. . . .

FORD: . . . Since the disengagement following the Yom Kippur War, there's been momentum and it's now at a point where, within a few months, hopefully, there will be a final conclusion on a successful basis of Camp David.

If anything . . . would be a tribute to President Sadat it would be a more rapid, satisfactory solution on the final points of Camp David.

For example, it would be a great step forward if by any chance there could be a moving up of the giving back of the Sinai to Egypt earlier than the April date, whether it was one month or two months earlier than the deadline.

Secondly, if there could be a more rapid finalization of the issue of autonomy and government in the West Bank and the Gaza Strip. I happen to believe that it would be to the benefit of Israel and of the PLO if there could be a more rapid decision on that and if I were in the shoes of the PLO, rather than fight it, I would accept whatever can be negotiated between Egypt and Israel.

I'm a firm believer that you can't always get the maximum you want in any negotiation. As long as you feel you can make headway and progress, you ought to take that step because you're in the right direction. . . .

CARTER: There is another point. . . . To characterize Palestinians as a body of people, as terrorists, is a very fallacious thing to do. It stigmatizes a race of people and is a racist approach which does damage to the peace process. I know a lot of Palestinians and I have had private meetings with many of them -- some very knowledgeable about the role of the PLO. Many of the PLO leaders are very moderate in abhoring terrorism and violence.

I do not see any possibility in the future, certainly within my lifetime, of the Palestinian world and the Arab world acknowledging any other leadership for the Palestinians other than the PLO. Formerly, as you know, it was King Hussein speaking for the Jordanians. But before Camp David there was a unaminous resolution including Egypt that the PLO was designated as the entity to speak for the Palestinians.

On Libya

CARTER: Well, I had to deal with it for four years, and Jerry before me. The Libyan president, Col. Muammar Qaddafi is a shrewd politician. He has a great sense of knowing how far he can go with not only his radical statements, but also his radical actions.

Qaddafi leads a nation of only 2 million people. It is inherently weak economically except in their enormous oil sales, a major portion of which he spends for tanks and airplanes, a good portion of which are just parked in the desert. He has to bring in North Koreans to fly some of his planes, and so forth. Now he is consolidating his position in Chad. I think that we ought to make it clear to the Sudanese, the Egyptians, and to Libya that any encroachment by Qaddafi on the freedom of Sudan would be considered a threat to us.

Egypt has a treaty with the Sudanese that requires military action in case the Sudan is threatened by Qaddafi or anyone else. I think when I was in office I was concerned about Somalia and Ethiopia, and I made it clear to them that the Sudanese could not be touched. So in my judgment we, the French, and others who have a direct interest in the eastern part of Africa cojointly ought to make it clear to Libya that very drastic action would be taken in case they violate the Sudan or have any other adventurism in northern Africa.

This could go beyond a military response by major trade action. We buy an enormous amount of oil from Libya. It would be a sacrifice on our part to do without it. . . . There may be other things that Jerry could think of, but that would be a very serious threat for the Libyans to move against either Egypt or the Sudan or other allies or friends of ours.

FORD: When you are dealing with a bully -- and I consider Qaddafi a bully as he relates to Chad, as he relates to a country like the Sudan -- you have to be very firm and you have to be prepared to exercise options that are clearly understood by a person like Qaddafi.

The United States considers the Sudan, for example, an independent country that needs help. Any direct action by a bully like Qaddafi into a country such as Sudan could very well precipitate the United States exercising any one of a number of options, and I am not going to discuss what options. If by any chance Qaddafi under the current situation in Egypt should feel that he could bully the new leadership there, the United States would again have to be very firm in exercising any one of a number of options.

This man is, in my judgment, a cancer in that area of the globe, and he has to be treated as a person that is not interested in peace, but is interested in some extent in his own personal aggrandizement, his own ambition to be a ruler beyond his own borders, and the world as a whole cannot tolerate that kind of continuous activity.

How it will be stopped I am not providing the prescription today. But the world as a whole has to understand that those kinds of people are not in the best interest of mankind generally.

On Ex-Presidents

CARTER: Jerry has had a lot more experience at that. (Laughter).

FORD: I believe this example of President Carter, President Nixon and myself participating in a mission, which I believe was in the best interests of the United States, is an excellent example of how former presidents can be brought back into service. I believe that the relationship that Jimmy and Dick Nixon and I established on this mission convinces us that we can be so utilized.

You cannot predict--and you shouldn't--how those occasions might arise in the future. But any president in the future has a reservoir of some talent, and I won't describe the talent, that ought to be utilized. And I am sure that every president that I know, and I know the three of us feel that being brought together on this occasion was in the best interest of the United States, and all of us in the future, if asked, would do exactly the same.

CARTER: Jerry has made some very good points. In some of my most difficult days as president, I called on Jerry to help me. I'll just give you one example.

The toughest political fight of my life, including my election as president, was the Panama Canal treaties. It was not a popular thing, as you well know. When I called on Jerry Ford to help me get a two-thirds vote in the Senate he responded immediately and he called a list of senators who were doubtful and helped to convert some of them to support it.

I never did call on him for anything that he did not respond to, and I think that former presidents are a reservoir of persistence on nonpartisan issues that are in the best interest of this country where their experience and influence can be used. They would be valuable to be used, and I would be honored to be asked -- not looking for a job. . . .

On Relations

CARTER: I don't think anyone who has not served there can adequately appreciate the continuity of problems and challenges and decisions. The things that Jerry Ford decided when he was in office affected me daily. Even the things that Harry Truman decided 30 years before I went into office affected me daily.

You can make modifications of a previous president's policies, but there is a stream of decisions and ideals and goals and hopes and dreams and problems and disappointments that transcends the identity of the president in the Oval Office. They come from the American people themselves. We share that.

Also, for former presidents we share a lot. How do we expend the talent and the ability and the knowledge and experience that we have derived from being honored in that way? We were just discussing, before you all came in during lunch, the formation and the structure and the presentation of a president's papers, the facts about a president's life, and an exhibition, how we should use our influence on a continuing basis.

I was very eager to hear Jerry's experience on building his library and his museum, because I am now facing the same question. I was discussing earlier with President Nixon the books that he has written.

I felt that it was important for me shortly after I got out of office to spend a lot of my time setting down my own experiences for the people to understand. Jerry has gone into the corporate world in a major way.

That is something that I might very well do in the months ahead, maybe not as deeply as he has, but that is just a matter of personal choice. I would have no aversion to serving on one or two corporate boards.

Jerry has done it very well and he has added his strength, his influence, and his dignity to our country on an international basis. So, each one of us on our own has to find where we can best serve, and I learned a lot from Jerry and President Nixon. I appreciate this chance to learn.

FORD: I think you might understand the situation better if at least I gave my interpretation of our relationship, Jimmy and mine. We had a very tough campaign in 1976, but at no time did I feel any personal enmity, and I don't believe that he did toward me. During the time that he was president, as President Carter indicated, he called me on four or five principally national security, foreign policy matters, and in every case I was pleased to respond. I didn't think any one of those was a partisan issue. As Jimmy said, the Panama Canal. He called me personally on the recognition of China.



CARTER: You are the first man we called in the helicopter coming back from Camp David.

FORD: Greek-Turkish aid problem. But on those issues, presidents, former presidents--at least I felt an obligation to help the person who had defeated me because our country's interest transcends whether I won or lost, and I think that President Carter feels precisely the same way vis-a-vis President Reagan and some of the comparable circumstances he will face.

Without revealing some of our discussions, but every time I came to Washington during President Carter's term of office, I was invited to come to the Oval Office for an hour, hour and a half, two hours, whatever it was. We did not publicize it. We talked about our areas of agreement. We had a few areas of disagreement, but they were discussed in the atmosphere of the highest office of the land, and when you are in that atmosphere you don't shout at one another.

You try to understand one another's differences, and it makes you more anxious to volunteer to be helpful if the then-president has any problems, whether they are public or otherwise. I think that will be the tradition of every succeeding administration. At least every evidence that I have is that that is the way the system has worked and that is the way the system will work and that is the way the system ought to work.

Q: Final thoughts?

CARTER: No, that is good.