With the risk of imminent military conflict between Britain and Argentina over the Falkland Islands appearing to have eased somewhat, the British government today signaled its readiness to consider all possibilities for a peaceful settlement of the crisis when Secretary of State Alexander M. Haig Jr. holds his second round of talks with Prime Minister Margaret Thatcher here Monday.
Foreign Secretary Francis Pym said that Argentina had been removing its warships from the 200-mile zone around the Falklands within which Britain had warned it would sink vessels on sight beginning 11 p.m. EST today. While Haig continues his mediation efforts, Pym said, he did not expect any Argentine "targets" in the zone.
Haig arrived in London early Monday shortly before the blockade went into effect, news services reported. No incidents were reported in the 200-mile zone.
Argentine officials said yesterday that they did not expect any confrontation after the deadline since all Argentine ships would be in port. But they gave no indication today that they had softened their position in the conflict, Washington Post correspondent Jackson Diehl reported from Buenos Aires.
British Foreign Secretary Pym also said the Thatcher government had not closed its mind to the use of a United Nations peace-keeping force in the Falklands "or any other possibilities" following an Argentine withdrawal from the islands. He suggested that it could be possible after an Argentine withdrawal for the British and Argentine governments and representatives of the Falklands' 1,800 residents to negotiate a compromise on sovereignty and future administration of the islands.
"The condition for us is that they withdraw first before anything can happen," Pym said in television and radio interviews, indicating no other British preconditions for negotiations.
"We have no idea what proposals he Haig is going to come with," Pym said. But he stressed his and Thatcher's willingness to listen to all suggestions when talks begin Monday morning with Haig and his aides.
The U.S. mediation team had been scheduled to return from Buenos Aires to Washington today, but after talks with Argentine leaders lasting until early today, Haig announced that he would fly to London instead to try to reach a peaceful settlement.
Argentine officials offered little optimism, however, that the U.S. efforts for a diplomatic solution would succeed soon, correspondent Diehl reported.
As the ruling military junta met twice on Easter to discuss the crisis, Foreign Minister Nicanor Costa Mendez told reporters, "We will continue negotiating with Great Britain with the assistance of the United States, but I don't find any progress in the negotiations."
Both U.S. and Argentine officials said Haig was carrying Argentine proposals for the British that Costa Mendez said "at best could serve as a base for an agreement." Argentine officials also indicated that Haig was likely to return to Buenos Aires from London on Tuesday for more talks.
Haig met with Costa Mendez and President Leopoldo Galtieri for more than 10 hours in talks that both sides indicated were open but difficult.
Haig's first stop in London last Thursday was preceded by much tougher talk by Thatcher and Defense Secretary John Nott than they offered today. Last week they apparently were trying to impress on Haig Britain's determination to secure an Argentine withdrawal. Today, Pym said, "Any area of diplomatic action that we can take, any effort we can make, we shall make to try and end this by peaceful means."
Speculation here focused on possible ways to make an Argentine withdrawal palatable for Galtieri, such as putting the islands in the hands of an international peace-keeping force during negotiations about the many possibilities of shared sovereignty and administration that have been suggested.
Asked about this today, Pym repeated Britain's insistence on prior Argentine withdrawal. He added, "We want British administration to go back, and then in the longer term, of course, there could after that be discussions. Now in the course of withdrawal and so forth, it may be that the diplomatic initiative could conceivably contain other elements in it. But we are not there yet--one step at a time."
Argentina, which calls the islands the Malvinas, has maintained consistently that it will not withdraw its troops unless Britain recognizes Argentina's sovereignty and calls back its task force. Buenos Aires says Britain has occupied the islands illegally for 150 years.
Although a formal Argentine government has been installed in the island capital of Port Stanley, Argentine officials have indicated that they are willing to discuss a mixed government for the islands or a peace-keeping force, as long as Britain is not involved in either.
Pym also pointed out that the British fleet, still about nine days away from the Falklands, would not be needed if Argentina withdrew its forces, implying that this could be another part of Haig's mission to secure an Argentine withdrawal. "Undertaking to withdraw makes a very major transformation in the entire scene," Pym said.
Asked about the Thatcher government's insistence that any negotiated settlement be acceptable to the Falklands' residents, Pym said their past opposition to British suggestions for a settlement of the sovereignty question could have been altered by the trauma of the invasion. He suggested that they might agree to a compromise that would guarantee their British identity.
He said he expected hostilities to be avoided inside the 200-mile military zone while exploration of a possible diplomatic settlement continues through Haig. "If there is going to be some arrangement by diplomatic means to end this dispute," Pym said, "I would not expect there to be any Argentine targets within that zone."
Pym and a British Defense Ministry spokesman said all but two of Argentina's warships were now in mainland Argentine ports. They did not say whether they believed the other two had not left the zone yet.
Analysts in Buenos Aires said today that the Argentine military was unlikely to offer a naval challenge to the British in the shallow seas around the Falklands, where several British nuclear-powered submarines are now believed to be available for action.
Instead, the military has focused its efforts on building a formidable defense on the rugged Falklands against any possible invasion. Reports in Buenos Aires have said that between 6,000 and 8,000 Argentine troops are now on the islands. Argentine press reports also have claimed that Argentina has mined the waters around the territory.
Military officials in Commodoro Rivadavia, the southern Argentine port where many of the military and supply operations for the islands are based, have said that they can keep the Falklands supplied with provisions long after a blockading British fleet would run out of fuel.