Following are excerpts from today's Washington Post interview with Israeli Prime Minister Shimon Peres: The Mubarak Initiative

I don't think we saw a breakthrough. I think we saw an opening which was done in a spontaneous way, and I'm not saying it in any negative sense.

You see, for this last period of time both Washington and we felt very strongly that the best way really to move ahead in the direction of peace was by the only way which exists, namely negotiation between the Arabs and Israel. On the Arab side there were many attempts to try and convince Washington to commit the United States on behalf of Israel and twist Israel's arm. May I say that Washington stood very firm: "You gentlemen go ahead and negotiate." Because after all, the problem is not to make peace between Jordan and the United States. And it's complete folly to think that even if Washington would theoretically agree, which it did not, that Washington can twist Israel's arm. Israel is an independent country . . . .

As things stand today, I believe Washington and ourselves see eye to eye. We would like to encourage any positive move. We wouldn't like to see a positive move in the wrong direction. Because then again we shall go back to square one . . . .

Maybe there is a chance to improve Egyptian-Israeli relations, which I am all for. And, like any negotiation, it is a negotiation on an issue and a negotiation with a consideration of the public opinion which prevails in every country . . . .There is an opening to improve Egyptian-Israeli relations. I'm all for it. Summit With Mubarak

I think ostensibly it should be closer, because out of the three issues Mubarak has mentioned, we by our own decision moved at least in two directions. The three issues were: Lebanon, where Israel took a unilateral decision. The second is what the Egyptians are calling "confidence-building" measures in the administered territories, on which we are moving. And the third is Taba, on which we are looking, all of us, for an honorable solution.

Now, the summit meeting itself, in the Egyptian judgment, should crown the negotiation and not christen it. Namely, it should lead to a conclusion. I can live with that. I am not so much in a hurry. Although, while a summit meeting beforehand would create a great deal of expectation, it would also carry a great deal of good will. As far as I'm concerned, I am not afraid of expectations, and I think good will is important.

The general attitude of President Mubarak was by and large positive. So for that reason I have said it's an opening. But then we must understand ourselves that the translation of a general attitude into small print, politically speaking, must be precisely done. Bilateral Talks

The mere fact that there is a more intense dialogue gives us an opportunity. Several Egyptian emissaries came here. One we met in Bucharest, the other we met here, then another one came here. On the other hand, our emissaries have been to Egypt: the minister of energy, the director general of the prime minister's office. It really gives an opportunity for a dialogue. So I would say, instead of an icy situation we have now a dialogue situation. And at least in our talks with the Egyptian envoy, I appreciate one point very seriously: that is an Egyptian understanding that while we can open quickly, reaching agreements may take quite a bit of time, and finding solutions may take even more. But the minute you start at least you have a start . . . . U.S.-Jordanian-Palestinian Talks

What some Egyptians feel -- I don't say President Mubarak, because I don't have direct quotations -- is that by establishing a dialogue with the United States the goal of legitimization of the PLO can be achieved, at least in part, without the PLO changing its own position . . . .

The tragic fact is that the PLO continues even today, actively and daily, with its acts of terror. I mean, instead of liberalizing there, they are terrorizing. And it's not enough, you know. You cannot come to a civilized place asking for the right of holding the microphone and at the same time not only holding a pistol in your pocket but using it. It doesn't go together. And all the variations of the PLO declarations create not really a clear direction toward peace but a confusion, which is close to camouflage . . . . Division in Israel's Governmment

Mr. Shamir [the foreign minister] said in two or three declarations I may cite that he is not against a meeting with a part Jordanian-Palestinian delegation that does not include the PLO.

I mean, there is no sense hiding the fact there are differences of opinon in the national coalition because it is made of two parties that hold different views. But there is a common denominator at least on how to start the negotiations.

The common denominator is being expressed in two basic proposals: an invitation to Jordan to come and negotiate. No prior conditions are being mentioned. And the second is an assurance on behalf of the national union government that any proposal that Jordan will put on the table we shall consider seriously. It is an open-ended situation: no taboos, no prior conditions, everybody can suggest whatever he has on his mind, and nobody can prevent the Arabs from suggesting anything. And there is a promise to consider every suggestion seriously.

This is as far as we can go, and I don't see any reason right now to make further decisions. Lebanon

No Israeli has ever suggested that we should remain in Lebanon forever. The real argument was not "if," but "when." Some people in the country feel very strongly that we have overextended our stay in Lebanon and this was a self-defeating timetable . . . . But what the government should have done, it did. I mean, to make a decision, to put an end.

Regarding the Shiites and other groups in Lebanon, when you look at their history you will never find a constant position . . . . Look at a history of Lebanon for the last 200 years. It's an unbelievable story of shifting positions . . . .

As far as the Syrians are concerned, I feel that they are nervously happy. But maybe from a strategic point of view I would put more of an emphasis on their nervousness and from a tactical point of view on their happiness. They know that Lebanon is not such a great gift . . . . They have been there. And because of the shifts in the different groups in the Lebanese mosaic, Syria, too, had to shift her alliance from one group to another. U.S.-Soviet Mideast Talks

I think they were approached with skepticism, and they wound up without either of the two sides expecting them to be continued. U.S. Economic Aid

What the administration is saying is basically two things: they appreciate the steps we have taken; they don't feel that we took enough. To which we reply that you don't run any democratic country with a professional economist. In any country, politics and economics are together. I mean, you have to lead your people, carry them forward, with their support . . . .

Some of the measures we were taking met with skepticism by the American experts. I shall give just one example: when we had our first package deal and the intention to put the freeze on prices and wages, they were extremely skeptical about the feasibility of it. Yet it worked much better than even we anticipated. So we believe that the set of measures that we are taking can yield better results than what is appreciated in the United States.

It would be inhuman and surely wrong on my side to say we didn't make mistakes. We did. But there are burdens on our economy which have nothing to do with normal mistakes . . . . The fact is that a quarter of our GNP goes for the maintenance of our armed forces and on top of it we have had to spend $20 billion over the last decade for two wars and one peace. And that is actually the money we owe . . . .

What we are trying to do very hard is to carry the people with us. Quite successfully until now . . . .

I think that we have a very friendly argument with the Reagan administration . We are explaining why we need emergency aid . We have neither a final yes nor a final no from the administration . They are careful not to offer us a menu of measures. They say, "You must do a little bit more," in general terms. I think they are very careful not to appear as though they intervene in our process, and we appreciate that.