Vice President Bush yesterday complimented Secretary of State George P. Shultz for having the "State Department focusing as never before . . . on international terrorism and what can be done about it."

Attempting to end the controversy ignited Thursday when Shultz spoke of the potential for loss of life in retaliating against terrorists, Bush yesterday wrote a last-minute section on terrorism into a speech to the Zionist Organization of America:

After consulting "several senior officials," Bush said the administration's terrorism policy is to "never -- never -- allow terrorists or fear of terrorism to determine" U.S. foreign policy.

Shultz said Thursday night in New York, "We must be willing to use military force" to combat international terrorism. "The public must understand before the fact that there is potential for loss of life of some of our fighting men and the loss of life of some innocent people."

The speech caused a furor, with Bush saying Friday that he disagreed with part of it and President Reagan saying, "I think what Secretary Shultz was saying was that you couldn't rule out the possibility of innocent people being killed. He was not saying that we would do that."

Yesterday, speaking to about a thousand people at the Zionists' national convention at the Mayflower Hotel, Bush said:

"Let me assure you of one thing, the United States under this administration will never -- never -- let terrorism or fear of terrorism determine its foreign policy. We are not going to move out and allow terrorists to move in. We're too great, too proud and too principled a nation for that."

According to Bush's aides, the vice president, who returned to Washington Friday afternoon from a campaign trip, spoke about the controversy with "several senior officials" at the White House and the State Department before inserting his remarks on terrorism into yesterday's speech.

The aides did not know whether Bush had talked with the president or Shultz.

Bush, who frequently cites Israel as possessing the best antiterrorist operation in the world, said the United States and Israel had suffered "common tragedies" in Lebanon. He said that after the "terrorist suicide attack" on the American Marine barracks in Lebanon in 1983, Israeli troops "suffered a similar attack just a few days later."

"I hope this dual tragedy helps us all appreciate more fully the menace of international terrorism," said Bush. "And I hope we will see terrorism's character clearly. Terrorism is not only or even predominantly a Palestinian phenomenon. It is truly international. Many local groups have broad and, often, common international connections and couldn't operate as they do without those connections.

"Isn't it time," Bush continued, "that we recognize this and join with our allies in a truly international drive against this insidious international terrorism?"

Elsewhere in the speech, Bush reiterated the administration's opposition to quotas, quoting Martin Luther King Jr.'s famous "I Have A Dream" speech. King said he wanted an America where people are judged "not on the color of their skins . . . . " Bush said: "That's our dream, too . . . and we're going to continue to fight for it."