A leading member of Al Fatah, the dominant Palestinian organization, said today that if the United States would accept Saudi Arabian Crown Prince Fahd's eight-point proposal as the basis for a new Middle East peace initiative, his organization would take the initiative "to get it endorsed by all Arabs."

Abu Iyad, Yasser Arafat's deputy leader in Al Fatah, the largest group in the Palestine Liberation Organization, said in an interview that "as soon as the U.S. accepts the plan without any reservations we will consider it a serious effort and sit down and accept it, too."

The Palestinian leader's comments, which implied an eventual willingness to accept the existence of Israel, was the latest step in an intense if ambiguous and uncharacteristically muted debate among Arab leaders over the Saudi initiative before next week's Arab summit meeting in Fez, Morocco.

The unusual aspect of the Arab debate over the Saudi plan, which among other things proposes the establishment of a Palestinian state with its capital in Arab East Jerusalem in exchange for an implicit Arab promise to coexist "in peace" with Israel, is not so much what has been said about it but what has not.

The Arab press has both praised and criticized the proposals and some hard-line Palestinian leaders of left-wing factions have denounced them as a U.S. Trojan horse. To date, however, only Libya has come out officially against them. The reaction of its allies in the radical Steadfastness Front -- Syria, South Yemen, Algeria and the PLO -- has ranged from studied silence to the veiled support of Arafat, chairman of the PLO.

In moving beyond Arafat's description of the Saudi initiative as "good and constructive," Abu Iyad said his proposed support was conditional on the United States accepting it in its "entirety" and not just praising one of the points as a "hopeful sign," as President Reagan did recently, while ignoring the others.

Washington and some European states have shown interest in the Fahd plan's seventh point, which, in calling for a guarantee for all states in the area "to live in peace," implicitly proposes mutual recognition between Israel and neighboring Arab states.

Although the West has found this point in the Saudi plan most positive, the Palestinians and their radical Arab allies find the point -- recognition of Israel -- least acceptable. Recognition is considered their main trump card in any possible future bargaining over the establishment of a Palestinian state.

To agree to accepting "coexistence" without any significant concessions from Israel and the United States for the creation of a Palestinian state, Abu Iyad said, would "be like buying fish that are still in the sea." Short of full acceptance of the Saudi plan by the United States and eventually Israel, he said, the PLO would not endorse the Fahd plan unless this point were dropped.

In the interview at his closely guarded headquarters in West Beirut, Abu Iyad, who in the past has represented some of the most radical tendencies in the Palestinian movement, said that certainly "all other points" of the Fahd plan "are acceptable" to the Palestinians.

The question of acceptance or rejection of the Fahd plan by Arab leaders could become moot by the time the Middle East's kings, ruling princes, presidents and dictators gather for their two-day session Wednesday in Fez.

In recent days there has been a flurry of criss-crossing diplomats, exchanges of diplomatic notes among Arab rulers and conferences of Arab factional leaders. As a result it now is unclear whether Saudi Arabia will be able to carry out its original plan of putting the Fahd proposal on the summit agenda for debate toward reaching an Arab consensus on it.

Important radical states such as Syria and Iraq have not spoken publicly about the Saudi proposal. But their reticence has more to do with reluctance to embarrass a state on whose oil munificence they depend than with any acceptance of the proposal.

According to knowledgeable Arab analysts here, the point of a quick visit to Damascus yesterday by Saudi Foreign Minister Prince Saud Faisal for talks with Syrian President Hafez Assad was to argue in private about Syrian insistence that there should be no open debate or vote on the Fahd plan at Fez in order to present a facade of Arab unity at the summit.

Assad has been quietly arguing that to avoid another unseemly spectacle of disagreement, the best course would be to send the question to a committee that would consider it and any other possible initiatives at a later date.

In an exchange of messages and emissaries, Assad has argued with Fahd in recent days that he is not opposed so much to the principles in the plan as to the timing.

He has suggested that it be discussed in private meetings rather than in formal sessions of the Arab summit where conclusions are made public in final communiques.

Assad has sought to sugar the pill for the Saudis not only by refusing to criticize them in public over the issue but by going so far as to impose restraints on his Steadfastness Front allies.

Although the front's foreign ministers met in Aden, South Yemen, yesterday to take a common stand on the Saudi plan, the conference ended a day early with no mention of a position on it.