The British government, under growing pressure from Conservatives who fear a "sellout" of the Falklands Islands, warned today that military action would continue until Argentina agrees to withdraw from the islands.
There was no fighting reported from the South Atlantic today, the first lull after four days of hostilities. But Prime Minister Margaret Thatcher told Parliament that while Britain would go forward with efforts at the United Nations to achieve a diplomatic solution to the crisis, "No military action has been stopped by virtue of negotiations."
All of the amphibious forces needed to invade the islands have reached the war zone, Defense Secretary John Nott told Parliament later tonight, and the government could choose options ranging from "a long blockade of the Falklands to their repossession by force."
Defining the limits of Britain's flexibility in the U.N. talks, Thatcher told skeptical questioners from her Conservative Party in Parliament, "We are working for a peaceful settlement, not a peaceful sellout." She and Foreign Minister Francis Pym said there would be no guarantee to Buenos Aires of eventual sovereignty over the islands, which Argentina seized April 2.
In an interview with three British journalists abducted and released in Buenos Aires Wednesday, President Leopoldo Galtieri reiterated the Argentine view that sovereignty was the key sticking point in the peace talks, correspondent Jackson Diehl reported.
"We are not going to renounce this objective," Galtieri said. "We can talk in order to reach it in a reasonable time, as long as this is not 149 more years," a reference to the years Britain held the islands.
The apparent toughening of the British stance was reflected at the United Nations, where British Ambassador Anthony Parsons said he had "fresh instructions" from his government to convey to Secretary General Javier Perez de Cuellar, special correspondent Michael J. Berlin reported.
The British were known to be seeking a stronger assurance that the wishes of the 1,800 Falklanders, most of whom want to remain part of Britain, will be taken into consideration in sovereignty talks that under a U.N. peace proposal would take place after a cease-fire and mutual withdrawal of forces.
Perez de Cuellar, echoing the same optimistic note he has sounded during a week of negotiations, told reporters "I still feel that perhaps at the end of the week we might have some really positive results."
A large group of Conservatives, who could threaten Thatcher's premiership if they rebelled against the government, appeared unconvinced by the prime minister's assurances. They suggested that negotiating concessions already made by Thatcher would allow Argentina to benefit from its invasion of the Falklands.
They criticized Thatcher's willingness to pull back its task force in step with a phased Argentine military withdrawal from the Falklands and to allow an international rather than solely British interim administration of the islands. They also attacked the government for stating it would only consider the wishes of the islanders rather than give them a veto in negotiations over sovereignty.
"The British people would accept casualties resulting from firm action, after the failure of negotiations and a genuine attempt to reach a peaceful solution, more readily than they would accept terms they would take to be a surrender of the principles on which Britain's task force set off," said a former Conservative Cabinet minister, Maurice MacMillan.
Thatcher sought to calm these fears by emphasizing Britain's unwillingness to agree to any settlement formula designed to assure Argentine sovereignty.
"The Argentinians had been saying that sovereignty must be transferred to them as a precondition of negotiations or at the end of negotiations," Thatcher said. "We cannot accept that in any way."
A senior government source said later that Britain was insisting that assurances of future Argentine sovereignty over the Falklands must disappear from Argentina's public statements as well as from its negotiating position.
Britain "must be absolutely confident that the Argentine government is committed to any agreement" reached in New York, this source said. "We are not going to take anything more on trust from that group."
More details emerged here today about the latest battle incident, yesterday's attack by 12 Argentine A4 Skyhawk fighter-bombers on picket ships guarding the British task force. A British ship shot down two of the first wave of four planes with Sea Wolf missiles and a third Argentine plane fell into the sea while trying to manuever away from the missiles, a Defense Ministry spokesman said today.
But a second wave of planes was able to drop shrapnel bombs on a British frigate, causing "a comparatively modest amount of damage" now being repaired, according to the spokesman. He said there were no British casualties.
Denis Healey, foreign affairs spokesman for the opposition Labor Party, gave Thatcher his strongest support yet in the crisis. He said the government was right to make "some important concessions" in negotiations and blamed Argentina for the lack of a settlement. He also rejected calls from the left wing of his party for a unilateral British cease-fire and withdrawal, which he said would amount to "handing the Falklands to Argentine President Leopoldo Galtieri on a platter."
Correspondent Diehl added the following report from Buenos Aires:
Despite the hard-line talk from London, Argentine government sources expressed optimism Thursday about a settlement in the six-week-old crisis because of what they described as a British willingness to make significant concessions to Argentina on the sovereignty issue.
Argentina, they said, is still seeking to attach several conditions to negotiations between Britain and Argentina that would tip the balance on the sovereignty question in Argentina's favor.
President Galtieri, in his interview with the three British journalists, was asked if Argentina was willing to lower its flag on the Falklands and discuss the sovereignty issue freely with Britain. The president answered with a quick "no."
He then added: "I think that they can talk, because I would say that there are other ways to make available to Great Britain an honorable and acceptable solution for its country."
The remark seemed to echo statements by Argentine government sources in recent days that their new proposals in the United Nations are designed to make it easier for Britain to accept Argentina's position on the islands, rather than offer substantial concessions on the sovereignty issue.
Galtieri's interview with the British journalists was part of a strong effort by Argentine officials to demonstrate that the abduction of the television team and the similar seizure Tuesday of an American camera team were neither carried out nor condoned by the government
The Argentine state news agency Telam reported that U.S. special ambassador Vernon Walters had been in Buenos Aires earlier this week on a secret mission.
In Washington, a State Department spokesman confirmed that Walters had visited Argentina at the request of Secretary of State Alexander M. Haig Jr. "to keep in touch and facilitate communication," The Associated Press reported.
The AP also reported that 150 Argentine military personnel and 39 civilians who had been captured by British forces on South Georgia Island April 25-26 arrived in Montevideo, Uruguay on a jet chartered by the Red Cross and boarded an Argentine Coast Guard vessel to return home.