Argentine military authorities, beset by dissension as British troops encircle Argentina's main garrison on the Falkland Islands, have agreed on a series of 11th-hour diplomatic concessions in the hope of preventing a bloody and potentially disastrous final battle, according to informed Argentine sources.
There is little hope that a diplomatic agreement can be reached, however, the sources said, and the ruling military junta is still prepared to mount an all-out defense of Stanley if British forces attack.
But sources here cited strong concern in high military circles over the prospect of a losing fight by Argentina that could result in hundreds or even thousands of casualties.
As a result, the junta now is willing to agree to a diplomatic settlement with Britain that would involve a mutual withdrawal of forces and unconditional, open-ended negotiations over the islands' future, the sources said. Argentina also has modified substantially its terms for the proposed withdrawal by British forces.
The new position, which represents the first time Argentina has been willing to agree to a diplomatic settlement without at least implicit assurances that its claim of sovereignty over the Falklands would be recognized, is regarded as the bare minimum necessary for a face-saving withdrawal by Argentine forces.
But Argentine officials are pessimistic that Britain will agree now to anything but an unconditional Argentine withdrawal, and the military junta will not accept that demand, sources said.
The new Argentine position was expected to be offered to United Nations Secretary General Javier Perez de Cuellar by two Argentine military officials who left Buenos Aires for New York last night. But sources said Argentine government officials were not even sure that the new settlement terms could be discussed before it was too late to prevent the battle for Stanley.
The Argentine sources said government officials had discussed the possibility of a diplomatic settlement with U.S. officials in Washington and hoped that the United States would pressure Britain to agree to the new Argentine terms.
In Washington, informed sources said that although the United States would like to see a solution that avoids bloodshed and offers Argentina a face-saving way out, there is little likelihood that the administration will press Britain to accept the Argentine proposal.
These sources noted that the ideas are almost identical to a plan--accepted by Britain but rejected by Argentina--proposed last month by Peru. The sources said the United States does not consider it reasonable or feasible to request that Britain now surrender its military advantage.
Under the Argentine peace scheme, which sources were reluctant to describe as a formal plan, the United States would participate, along with Argentina, Britain and perhaps others, in a temporary administration on the islands through the offices of the United Nations.
Argentina would pull its forces back to their mainland bases and Britain would be required to remove its fleet an equal distance from the Falklands, about 400 miles. In the past, Argentina has insisted that the British forces withdraw to their home bases.
Despite the new concessions, analysts here pointed out today that the Argentine position still appeared to fall short even of the conditions outlined in Britain's last peace proposal at the United Nations. That document would have excluded the Falkland dependencies of the South Georgia and South Sandwich islands from the negotiations and reinstated the islanders' councils with only token Argentine representation.
Since then, officials in London have indicated that only a unilateral withdrawal by Argentine forces would be acceptable.
Some high-ranking Argentine Army officials are believed to feel that Argentina should agree to comply with U.N. Security Council Resolution 502, which calls for a unilateral Argentine withdrawal followed by negotiations, rather than fight what appears to be a hopeless battle, sources here said. But these generals are reluctant to force such a position on the junta because they could be accused of treason by nationalistic Argentine political sectors, the sources said.
Before leaving for New York last night, Air Force Brig. Jose Miret, the government planning secretary who along with Navy Rear Adm. Benito Moya carried the new proposals, told reporters, "We have softened our position to the maximum . . . we have given up or are giving up everything that is prudent in order to achieve an honorable peace."
Miret said, however, that "we have encountered only intransigence from the other side" in Britain.
Sources said Argentina's new diplomatic position had been adopted amid strong disagreement in military circles over Argentina's course in the conflict.
The Air Force commander, Gen. Basilio Lami Dozo, whose service has suffered extensive losses while bearing the weight of Argentina's defense of the Falklands during much of the fighting, was said to be pressing the president, Leopoldo Galtieri, who is also commander of the Army, and the Navy commander, Adm. Jorge Anaya, to seek a settlement.
Galtieri and Anaya were said to have stuck to a hard-line position, and there was some feeling among high military commanders that Argentina should adopt a policy of "total war," attempting to carry on the conflict with Britain even should its troops be ousted from the Falklands.
Senior Army commanders, however, are reported to be skeptical about this policy and deeply concerned about the possibility of a losing battle at Stanley that would result in severe losses for the Army while worsening the chances of negotiations over Argentina's sovereignty claim.
With the military battle for Stanley expected to go on despite these doubts, however, military officials sought today to assure public opinion that Argentine forces were well-prepared for their final stand.
Defense Minister Amadeo Frugoli said the battle in the Falklands was progressing exactly as the military command originally had foreseen it, and added, "The country should be absolutely assured that the professional ability and the heroic purpose in the the armed forces' performance are going to be maintained to the ultimate consequences."
The military command offered no official report on military activity in the Falklands during the day, but reported last night that British troops were skirmishing with Argentina's forward units at Stanley.
Argentina's commander on the Falklands, Gen. Mario Benjamin Menendez, also was quoted as telling his troops that the expected British offensive would be "defeated by the determined action of each one in his place of combat."
"All of our efforts, the hours of waiting, the cold, the tiredness, the vigilance, have arrived at their end," the state news agency reported Menendez as saying. "If every man with his rifle, his mortar, his machine gun or his artillery fights with the valor and the heroism that has always characterized us, success is ensured."
In another development, the Chilean Embassy here issued a statement denying that British planes had been based in Chile in preparation for a possible attack on Argentine mainland air bases. Reports published here said that the British had considered launching air attacks from Chile to coincide with their landing on East Falkland Island on May 22.
The embassy statement said that the report was "absolutely false" and was designed to disrupt Argentine-Chilean relations."