The latest U.S.-Israeli dispute over Jewish settlements in occupied Arab territories is described by U.S. officials as "setting the stage" for a strong new American call for a settlements freeze when President Reagan meets Israeli Prime Minister Menachem Begin here Nov. 19.
The officials, who declined to be identified, said this was the principal reason for Thursday's U.S. statement criticizing Israel's settlements activity on the West Bank. It chastised Israeli actions as "most unhelpful" and questioned whether Israel is willing "to abide by the promise of U.N. Security Council Resolution 242 that territory will be exchanged for peace."
Underlying this tough talk, the officials said, is Reagan's determination to give fresh impetus to his Sept. 1 Mideast peace initiative, whose subsequent lack of progress is due in part to Begin's vehement opposition.
A key element of the Reagan proposal calls for a moratorium on new settlements, and U.S. officials acknowledged that the president is under heavy pressure from Arab governments to demonstrate that the United States can use its influence to make Begin more flexible.
However, the officials also noted, the upsurge of public pronouncements in Israel about settlements during recent days is regarded here as an attempt by Begin to signal his rejection of a freeze. The officials said they believe Begin plans to use the White House meeting to try to convince Reagan that the Mideast initiative should be dropped.
Since the administration insists that it has no intention of abandoning a plan to which the president has committed his personal prestige, the officials said the Nov. 19 session, in contrast to past meetings between the two leaders, is expected to involve some blunt talk that could lead to new strains in U.S.-Israeli relations.
At past get-togethers, including one here in June at the height of the Lebanon war, Reagan did not live up to advance expectations that he would get tough with Begin and proved instead to be deferential to the Israeli leader.
But, the sources said, this time the president appears to have no choice other than trying to force the issue over settlements if his initiative is to retain credibility in the Arab world and show any hope for movement.
For that reason, the U.S. statement on Thursday was aimed not only at Jerusalem but also at such Arab capitals as Amman, where Jordan's King Hussein is involved in complex efforts to test whether he can muster sufficient Arab backing to enter the peace talks over the future status of the West Bank and Gaza Strip.
Since the Reagan plan calls for these territories to gain eventual independence "in association with Jordan," Hussein's participation is critical to U.S. hopes.
The view here is that Hussein's maneuvering is in a critical phase where he needs all the help that Washington can give.
In that context, the settlements issue always has been especially important because the Arabs regard it as a litmus test of U.S. influence with Israel. Begin never has made any secret of his belief that the West Bank eventually should become part of Israel; the Arab world views the settlements as part of a "creeping annexation" program to force the outcome by establishing a strong Israeli presence among the Palestinian inhabitants.
In the past, Begin has resisted every U.S. call for a settlements moratorium and has even taken as encouragement Reagan's initial refusal to follow the lead of past U.S. administrations and brand the settlements as "illegal."
That is something the Israeli leader seems certain to remind the president about when they meet.
It was against this background that the latest U.S.-Israeli dispute arose. Initially, many diplomatic observers were puzzled since the exchanges between Washington and Jerusalem involve settlements whose proposed establishment had been announced earlier and technically are not "new."
However, one senior U.S. official insisted yesterday, "If there hadn't been a provocation, there wouldn't have been a statement by us."
Specifically, he added, the provocation was provided by Deputy Israeli Prime Minister David Levy who announced last week that the government planned to proceed soon with establishing five of the eight settlements it authorized on the West Bank in September.
In September, Levy, who also is housing minister, described the decision on the eight settlements as Israel's "answer" to Reagan's call for a freeze. According to one U.S. official, that was regarded here as "sticking it in the eye of the president," and he added that the administration has been looking for an opportunity to reply in a manner that can be viewed as a direct response to Levy's September remarks.
But, U.S. officials added, the timing of Levy's latest statement also was viewed here as a deliberate attempt to underscore Begin's hard-line position on settlements before his U.S. visit.
As a result, they said, the administration decided it was necessary, as one official put it, "to lay down a marker demonstrating that Washington is prepared to be as unyielding as Begin and to let the Arabs, particularly Hussein and the West Bank Palestinians, know that Reagan will stand firm in his demand for a freeze."
The possibility of a further escalation in the conflict arose Friday when another Israeli official, Deputy Agriculture Minister Michal Dekal, told the Israeli state radio that the five settlements mentioned by Levy are part of a master plan calling for creation of 20 new communities in the West Bank and Gaza during the coming year.
However, U.S. officials said yesterday they would have no further comment, since the statement on Thursday has left no doubts about where the United States stands.
In addition, some officials said, the matter is being pursued with the Israeli government in private discussions, particularly through the U.S. Embassy in Tel Aviv. They insisted that by the time Begin arrives at the White House he will be in no doubt about Reagan's determination to confront the issue head-on.