King Hussein is considering severing Jordan's remaining political link with the Israeli-occupied West Bank, leaving the fate of Palestinians there to the Palestine Liberation Organization alone, authoritative sources said today.
This step would be accomplished by calling elections in Jordan, possibly within the next few months, in which the West Bank would not participate.
The proposal appeared to reflect the deep frustration felt here at the collapse of talks between Hussein and PLO Chairman Yasser Arafat on an arrangement to enable the king to join talks on President Reagan's Middle East peace initiative.
In Washington, U.S. and Arab officials said that King Hussein had not given up hope for the Reagan plan and suggested that the new Jordanian proposal could be designed to pressure Arafat to compromise.
The implied threat of the complicated maneuver is ultimately to underscore the PLO's weakness by handing it full responsibility for the West Bank Palestinians at a time when the PLO has been scattered throughout the Arab world following its expulsion from Lebanon last summer by the Israeli invasion.
By surrendering Jordanian political responsibility for the West Bank, the king effectively would do away with a network of institutions that have maintained a degree of Arab authority in the area and leave Israel with a vacuum in which to expand its control.
Jordan seized the West Bank in the 1948 Arab-Israeli war and later annexed it. Israel captured the area in the 1967 war, but the labyrinth of laws and bureaucracy governing the area are of both the Jordanians and the occupying Israeli military authorities. The Jordanian parliament, which was dissolved in 1975, included representatives from both the East and West Banks.
Reagan's plan proposed creation of a Palestinian entity in the West Bank and Gaza Strip, also occupied by Israel, that would be associated with Jordan. The PLO is sticking to its demand for an independent Palestinian state.
British Foreign Minister Francis Pym was to fly here Tuesday from Saudi Arabia, where he has conducted extensive talks with the monarchy there. The Saudis bankroll Syria, whose representatives on the PLO's executive committee led the effort to scuttle the Reagan peace plan.
Western diplomats still expressed some hope that the initiative could be salvaged. One said he believes that there was a strong desire among Arab states to settle the 35-year-old Palestinian problem, but he confessed that there was no longer a mechanism for doing so. He held hopes that something might be constructed during the next few days but admitted that he could not forecast what might happen.
Hussein made clear in a statement released late yesterday that he was declaring an end to his own efforts to get an agreement with Arafat to begin negotiations. He also said he would not break ranks and begin negotiations alone. Those sentiments were strongly reinforced in private comments today by Jordanians at the highest levels.
"We are out of the limbo now," one official said, showing both the fatigue from the long-running efforts that began in October and the joy at having the situation finally resolved even as he and others felt the result was unsatisfying.
High Jordanian sources made clear that Hussein now believes that the ball is out of his court, that it is up to the PLO to change its mind and that moderate Arab states should pressure it to do so.
The monarch, the sources said, also believes that the United States should persuade Israel to withdraw from Lebanon and halt construction of settlements on the West Bank. He is understood to think that such acts would bolster the Arab world's confidence in the United States.
A luxurious guest house in an exclusive embassy row neighborhood here where Arafat had stayed during the talks, the focus of attention and expectation last week, was nearly deserted today.
Only a low-ranking employe was left at the nearby PLO office, and he would say only that the PLO would have no reaction to Hussein's statement until after a meeting soon in Tunis.
Top aides to Arafat were said to be scattered around the area, in Damascus, Baghdad and undisclosed points. Arafat was in North Yemen, the third stop on his travels after walking away from the negotiating table with Hussein last week.
With some measure of indignation, a senior Jordanian diplomat said today, "The people under occupation on the West Bank and Gaza Strip are the first sufferers from a stagnant lack of movement in the Arab world."
"You cannot make a Palestinian state flying from one town to another," he said.
The next move that the Jordanians are contemplating, which was only sketchily outlined in hurried conversations today, effectively would reestablish the country of Transjordan that existed on the East Bank of the Jordan River before Jordan seized the West Bank in 1948. Jordan would yield the responsibilities in the West Bank that it has shared with Israel since 1967.
It is still Jordan, for example, that decides the curriculum in public schools. West Bank lawyers belong to Jordanian guilds. Jordan has a Cabinet member whose job is to oversee problems of Palestinians on the West Bank and in Gaza. Jordan is a market for agricultural products on the West Bank and Gaza. Expelled mayors and others find refuge on the east side of the river. Other West Bank Palestinians stripped of their positions but allowed by Israeli authorities to remain on the West Bank have been supported financially by the Jordanians.
Despite these links and Jordan's past control of the West Bank, Jordan endorsed a resolution at the 1974 Arab summit in Rabat, Morocco, that named the PLO as the Palestinians' sole legitimate representative. Many Jordanians here say that the PLO has used the summit to claim legitimacy but not exercise responsibility for West Bank Palestinians. Hussein reportedly made this point to Arafat in the aborted talks.
Hussein made clear in his statement yesterday that he would not attempt to make himself king of the Palestinians or go against the consensus of other Arab states. But there is a clear feeling here that if the problems of West Bank Palestinians, after nearly 16 years of occupation, are not resolved soon, there is the possibility that their faith in the PLO might fade and they might turn to others for representation.
According to a high Jordanian source, the talks between Arafat and Hussein broke down completely on Saturday when a PLO emissary presented the king with demands for an independent state. The king felt that the demand took the deliberations back to square one.
It is understood that the king thought that he and Arafat earlier in the week had reached agreement that while self-determination for Palestinians could continue to be a long-range goal, the mechanism for achieving that would be the Reagan plan, which explicitly ruled out an independent state.
The Reagan plan also denied the PLO representation in the negotiations, something that chafed the organization. But that was not the major stumbling block, according to indications here.
The Jordanians had urged the PLO to accept the Reagan plan, at least as a beginning, arguing that only the United States could force Israel to halt construction of settlements on the West Bank and ultimately withdraw from there.
"If you want to have an independent state, the basic thing for it is you need the territory," said the senior Jordanian diplomat. "This is what we saw in the Reagan plan. It provides a mechanism because the only country that can effect a change in the situation on the ground is the United States."
"The territory and the people . . . are the basic embryo of a future state," he said.
It is understood that Hussein thought he had an agreement with Arafat that would have bridged the differences between the Reagan plan and the proposals by an Arab summit in Fez, Morocco, in September for an independent state and PLO representation. A draft agreement was prepared last Monday after four rounds of private talks between Arafat and Hussein had ended, sources said. Hussein had signed it and his information minister Adnan Abu Odeh took it over to PLO headquarters for Arafat's signature.
The PLO leader, according to authoritative Jordanian sources, balked at signing, saying he must first go away for two days to advise his constituency of his intentions.
Tuesday morning Arafat flew to Kuwait where he convened a meeting of selected PLO leaders and the central council of the Fatah party, the PLO's largest party and Arafat's primary base of support. But instead of advising them of the agreement, he apparently put it to a vote. The council rejected it, suggesting a series of changes that effectively stripped the draft agreement of all elements reflecting support of the Reagan plan. Indications are that pro-Syrian elements were the leading rejectionists, but some of Arafat's close advisers also were in the opposition.
Arafat never returned to Amman, something that Hussein noted in the statement that he released Sunday. Instead, the PLO chairman sent two aides to tell the king the news.