In mid-April, a delegation of the Palestine Liberation Organization slipped quietly into Cairo to begin making peace with President Hosni Mubara w0080 ----- r a BC-05/01/83-RIFT 3takes 05-01 0001 Arab Rift With Egypt Remains Despite Efforts by PLO, Others By David B. Ottaway Washington Post Foreign Service

CAIRO, April 30--In mid-April, a delegation of the Palestine Liberation Organization slipped quietly into Cairo to begin making peace with President Hosni Mubarak after a blowup between the two in February in which the Egyptian leader, in an uncharacteristic outburst, threatened to take measures against the 40,000 Palestinians living here.

It was not the first time that PLO military intelligence chief Atallah Mohammed Atallah, also known as Abu Zaim, had led a delegation here, despite the lack of official relations between the PLO and Egypt since the signing of the Egyptian-Israeli peace treaty in 1979.

PLO envoys like Abu Zaim have come to Cairo with increasing frequency since the Israeli invasion of Lebanon last June, sometimes with messages from PLO Chairman Yasser Arafat for Mubarak to hand on to the United States and at other times just to exchange views on Middle East peace efforts.

Since last June the PLO has reopened two of its offices here; a "pro-Egyptian" faction has emerged, with Arafat's obvious blessings, agitating for close cooperation between the organization and Cairo; and Abu Zaim, among other officials, has bought a home here in anticipation of a reconciliation.

Arafat has sent strong signals he wants to come back here, where he began his political career at Cairo University and where two sisters and a brother live. "Egypt," he remarked recently in a moment of nostalgia, "is my great love. It is compassion and warmth."

The love-hate relationship between many PLO leaders and Egypt--officially still divorced on grounds of the Israeli peace treaty but nonetheless courting each other for a new marriage--sums up the state of diplomatic play between Cairo and most other Arab capitals today.

Both sides seem all too aware of the demoralized and fragmented Arab world's need for new leadership and for the weight of Egypt to be thrown into the Middle East political and military equation, now so lopsidedly favoring Israel. But Egypt's Arab suitors seem unable to take the formal step of restoring relations, despite their repeated calls to let bygones be bygones, and their recent meetings with Mubarak outside the main Arab arena.

At the summit of the Nonaligned Movement in New Delhi in March, Mubarak met publicly with four Arab rulers--President Amin Gemayel of Lebanon, Sheik Jaber Sabah of Kuwait, Sheik Khalifa Thani of Qatar, and King Hussein of Jordan--none of whose governments has restored relations with Cairo.

Also, a host of Arab emissaries from the 17 boycotting states has visited Cairo, including a top Iraqi, Taha Yassin Ramadan; Moroccan Foreign Minister Mohammed Boucetta; Saudi Arabia's Prince Bandar bin Sultan and Lebanon's Ambassador Ghassan Tueni.

Mubarak, according to a close associate, now talks frequently by telephone with Iraqi President Saddam Hussein, Hussein of Jordan and Saudi Arabian King Fahd among others.

"Every morning, a message from one Arab country or another comes to him," the associate said; Hussein and Saddam are in "direct contact" with Mubarak "all the time."

Iraq has opened a military mission here to handle its billion-dollar yearly arms purchase. Jordan has just restored trade relations, and Kuwaiti investment, both private and public, has resumed on a large scale.

Yet, the Arab economic and diplomatic boycott of Egypt, solemnly declared in Baghdad on March 31, 1979, officially remains in place. Why the boycott has not been formally lifted--even though it often is broken, even by the PLO and Iraq, who led the drive to punish Egypt--is a study in the dynamics and pitfalls of Arab politics. It is above all another demonstration of the disproportionate strength of hard-line leaders and forces in the Arab world and their ability to checkmate the wishes of even a large majority of the Arab League.

Perhaps the most interesting twist is the role of Saudi Arabia, which has the diplomatic clout to lead half a dozen or more states in breaking the boycott but has chosen not to.

Playing upon the kingdom's fears of terrorism and divisions within Arab ranks, the hard-liners have managed to turn Saudi Arabia into an ally and use its own argument for the need to maintain an Arab consensus on potentially divisive issues to block Egypt's reentry into the Arab fold.

As a result, an expected new axis of pro-western states led by Egypt, Saudi Arabia and Iraq--and with Cairo as its center--has failed to emerge, leaving the Arab world fragmented.

Egypt's continuing isolation is also the story, however, of missed opportunities by Mubarak, who has avoided trying to force the issue or taking risks that might create trouble for him at home.

Still, Mubarak has a stake in seeing the doors of the Arab world reopened to Egypt. Not only would it implicitly justify Egypt's peace policy toward Israel, it would also bring him enormous popularity at home--particularly with the frustrated intelligentsia, which resents the boycott probably the most of any group here.

The first of Egypt's missed opportunities came last August, when the United States pleaded with Mubarak to take in 6,000 of the Palestinian guerrillas trapped in the Israeli siege of Beirut. Had Mubarak done so, Arafat, who later visited all Arab countries that accepted his guerrillas, presumably would have come to Cairo for the ritual reconciliation, paving the way for other Arab leaders to lift the boycott.

But caught in a political crossfire at home between Egyptian factions opposing and supporting the PLO, Mubarak said no. He was reported then to have been strongly influenced by his security men, who argued that the risks to his regime were too great.

In November, Arafat sent Abu Zaim to negotiate conditions for a visit to Cairo, coupling this with a campaign of flattery through the Egyptian press.

In an interview with the magazine Al Mussawar, Arafat said there was "no substitute for the leading role of Egypt" and compared the Arab world without it to a riderless horse. "I say to you that the horse waits for its rider," he said.

In another interview with Al Ahram Iqtisadi, an economic weekly, Arafat said he needed Egypt "to protect my back against Zionist wolves and Arab dogs" and that all he wanted from Mubarak as a condition for coming to Cairo was a declaration of principles reaffirming the PLO as the sole, legitimate representative of the Palestinian people.

Mubarak refused this and other of Arafat's conditions and told the PLO chief he would not be welcome unless his visit resulted in some breakthrough, such as the PLO's unilateral recognition of Israel or a positive response to President Reagan's Middle East peace initiative.

Then in mid-February, the whole process of rapprochement between Mubarak and Arafat came to a halt as a result of resolutions adopted by the PLO's national council meeting in Algiers.

There, pro-Syrian hard-line factions, determined to block Arafat's opening to Egypt, pushed through resolutions strongly condemning it and the Camp David accords. One called upon the "Egyptian people and their national forces" to work for the abrogation of the accords and upon "popular democratic forces" here to struggle against any normalization of relations with "the Zionist enemy."

They had their intended effect. The implication that the Mubarak government was neither "national" nor "popular," and the PLO appeal to the Egyptian people to turn against its policies, provoked Mubarak's first angry public tirade since he came to power in October 1981.

Mubarak lambasted the PLO for its hypocritical attitude toward Egypt and, reminding it of all he had done diplomatically on its behalf during the Beirut siege, he warned that his patience had come to an end. "The cup is overflowing," he said. "If there will be no PLO restraint, I shall speak to the Egyptian people on the air frankly and my reaction will be very severe. I am not prepared to set up a state within the state or above the state."

Later Mubarak refused to meet with Arafat during the nonaligned summit conference, and he has rebuffed attempts at a reconciliation, closing the door for now on Egypt's return to the Arab world through the auspices of the PLO.

In late December, Tariq Aziz, then Iraq's deputy prime minister and now foreign minister, said in an interview with Al Ahram that Iraq was "not against restoring ties with Egypt." He offered to meet with Egyptian Foreign Minister Kamal Hassan Ali or his deputy, Boutros Ghali, to discuss the matter.

Within a week, Aziz met Ghali in Paris but, contrary to wide expectations, nothing came of the meeting.

Western analysts here point to an interview Aziz gave in February in which he said Iraq had decided to wait until there was an "Arab consensus" on the issue. Iraq, at the time, was seeking billions of dollars in aid from Saudi Arabia and presumably had decided to defer to its line.

The role of the Saudis in blocking Egypt's return has become a sore point at the Foreign Ministry here. Egyptian officials say the kingdom, hoping to maintain a leading role in the Arab world, has no real desire to see Egypt again occupying center stage.

Faced with all this, Mubarak seems to have retreated into an attitude of "they need us worse than we need them," soft-pedaling the issue of formal diplomatic recognition.

"Mubarak himself feels that the best thing is not to send ambassadors now because he feels the time is not ripe," said one close associate. "He's not applying pressure on any one to do it.

"Hussein wants to do it. Moroccan King Hassan will do it. But would that help us in any way? The answer is a big no. Would it help solve the Palestinian issue? The answer is a big no."

Egypt's hope now is that an agreement between Jordan and the PLO on entering U.S.-sponsored Middle East peace talks will clear the way for at least a bloc of moderate Arab leaders, namely those of Iraq, Jordan, Lebanon, Morocco and of the six conservative gulf oil states, jointly to decide to restore relations.

This might also clear the way for Arafat and at least his own PLO faction, Fatah, to set up headquarters in Cairo--a step some western and Arab analysts feel he may have to take anyway to ensure his personal security against those opposing any accord.

"The moment he announces a deal with Hussein," one well-informed Saudi official said of Arafat, "he has to go straight to Cairo for protection."