President Reagan states and the Israelis state that there can be no negotiating with terrorists: otherwise they will be encouraged to sally forth and terrorize again. With the second part of this statement, everyone agrees. When terrorists reclaim captured comrades, humble a government, or draw attention or political advantage to their cause, they have won something of value and their success is bound to encourage them or others to have another go.

What this formulation omits, however, is that there are only a finite number of ways to fight back, once hostages have been taken. There is force; Mr. Reagan seemed to rule it out in a television appearance Monday night that otherwise did not strengthen his hand. Bringing nonviolent pressures to bear over time to induce the terrorists to recalculate the odds is the route he appeared closer to endorsing, notwithstanding its similarity to Jimmy Carter's course in Iran. Otherwise, there is the painful course of negotiations. It offers the prospect of quick relief and saving lives this time, but it provides incentives for further terrorism.

The Israelis' pattern is the most relevant here. It is to refuse to negotiate; to negotiate if necessary; to swear they will never negotiate again, and meanwhile, to tear themselves apart over whether it was wise to have negotiated. A country that cares for human life and has a government responsive to public feeling cannot expect to have it another way. Deterrence -- that is, community with prospective victims -- has its just claims, but the full burden of it cannot easily be put on current victims. Community with them has its claims too. Equating negotiating with "caving" is no help: it depends on the circumstances and terms.

As it is, the International Committee of te Red Cross appears, still, to be in a position to facilitate the indirect negotiation that has lain there ready to be pursued from the start. The Shiite terrorists can release the hostages, and the Israelis, bowing to no one, can release the Shiite prisoners whom they hold on their soil and whom they had already determined to release anyway; the hijacking interrupted the onset of the release. It will be tough on the Israeli public, which has reason to worry about terrorism, and on the Israeli government, whose opposition is already exploiting the issue, and will win Israel respect from decent people.

A range of more effective policies, from physical security to diplomatic preemption, has to be put into place to ensure the safety of Americans. Where these policies fail, a range of other ways, not excluding retribution, must be found to demonstrate that there are costs to terrorizing Americans or allowing others to. Giving Greece fresh reason to improve its lax security should be only a start.