King Hussein of Jordan led an Arab League delegation in meetings with Prime Minister Margaret Thatcher today, ending a prolonged Anglo-Arab dispute over Thatcher's refusal to meet officials of the Palestine Liberation Organization.
After months of negotiation, the dispute was overcome by the selection of a leading Palestinian academic, Walid Khalidi, for the delegation. He is a member of the Palestine National Council, the Palestinians' parliament-in-exile, but is not an official of the PLO.
The delegation had been scheduled to visit London last fall to explain the Arab League's latest plan for an independent Palestinian state. But the meeting was called off because of Thatcher's insistence that unless the PLO renounced violence she would not receive any of its representatives.
In retaliation for what was regarded as a rebuke of the Arabs' position, Saudi Arabia canceled a scheduled visit by Foreign Secretary Francis Pym, and Britain's relations with other countries in the region also suffered a setback. There were hints that Britain's trade with the Middle East would be affected.
To show its eagerness to patch matters up, the British went to unusual lengths to give the delegation--which also included Saudi Foreign Minister Prince Saud Faisal and the foreign ministers or deputies of Morocco, Syria, Algeria and Tunisia--a warm welcome.
The visitors were accorded the full pomp and circumstance of a state visit, and Thatcher curtsied when greeting Hussein. Later the delegation, including Khalidi, paid a call on Queen Elizabeth.
The fuss over the delegation's composition overshadowed the substance of its mission. Similar groups had visited Peking, Moscow, Paris and Washington. President Reagan also refused to meet anyone from the PLO, so a Palestinian official accompanying the delegation remained in his hotel.
A statement released by the British after the talks said they were held "in an extremely friendly and constructive atmosphere." The statement also reaffirmed Britain's commitment to "security for all states in the region," including Israel, as well as "justice for the Palestinian people including self-determination."
The Arab hope, diplomatic sources said, is that Britain will urge Reagan to put greater pressure on Israel to stop placing settlements on the occupied West Bank and to withdraw its forces from Lebanon. These are the items currently at the top of the Arab agenda, and on both issues, Britain's view is genuinely close to the Arab stance.
One irony about the squabble over the delegation is that Britain's relations with Israel have been strained since the government's denunciation of the invasion of Lebanon last summer. More recently, Thatcher sent an emissary to Jerusalem to say that Israel's proposed new ambassador to London, Eliahu Lankin, would be unacceptable. She complained of his involvement in the anti-British underground in Palestine before the creation of Israel. Lankin's name was withdrawn.
"Lankin was a terrorist in his day," one senior British diplomat said, "and Thatcher cannot abide terrorism." This view, he said, also justified Thatcher's continuing refusal to meet PLO representatives although other officials in her government had done so.
Britain has another reason to seek good relations with the Arabs, particularly the Saudis. The recently concluded meeting of the Organization of Petroleum Exporting Countries at which the price of oil was lowered specifically urged Britain's state-owned oil company not to set off a price war by again dropping the price of its North Sea crude, which it cut to $30.50 a barrel last month.
Hussein is scheduled to have talks with PLO leader Yasser Arafat in Amman next week over whether the king should represent Palestinian interests in any talks on a Palestinian state. The Reagan administration is anxious to get Hussein involved in negotiations with Israel.
[Philip C. Habib, the U.S. special envoy on the Middle East, was flying to London Friday night to meet Hussein, State Department spokesman John Hughes announced. Hughes said Habib would brief the king on the latest round of talks held in Washington with the foreign ministers of Israel and Lebanon.]