Only weeks ago the United States and the Soviet Union were competing with one another in laying down dramatic proposals for 50 percent cuts in strategic offensive arms. An "agreement in principle" at the forthcoming summit to give new impetus to arms control negotiations seemed a real possibility. As late as last Friday night, on the eve of his departure for Moscow with Secretary of State George P. Shultz, White House national security adviser Robert C. McFarlane said in New York that "there is a very good prospect" that the summit could produce "a commitment on both sides" to pursue reductions of offensive arms and new understandings on defensive systems "that would truly be a watershed."
But high-level discussions in Moscow this week have diminished those expectations sharply. Yesterday administration officials said that the Nov. 19-20 meetings between President Reagan and Mikhail Gorbachev are unlikely to provide the basis for major agreements between the nuclear superpowers.
The summit probably won't be an abject failure, these officials said, because neither side wants its leader to be embarrassed. But the new message from inside the administration is that it is now difficult to imagine how the summit could produce anything to justify worldwide hopes for a basic improvement in U.S.-Soviet relations.
The prospects for success at the summit were dimmed on Tuesday by a four-hour confrontation in the Kremlin -- not so much a confrontation between the superpowers, but more a confrontation with reality.
After five years of uneasy sparring between the Reagan administration and a succession of four Soviet leaders, both sides apparently discovered that they really don't share much common ground on the issues that divide them.
U.S. participants found they had even less in common with Gorbachev than they had expected, and reported that there was no movement whatever toward agreements on arms control, regional conflicts or other major issues.
Gorbachev, for his part, is believed to have found little of the willingness to compromise that he had sought by inviting Shultz and McFarlane to Moscow for a final presummit discussion.
The key issue was arms control, especially the space defense area that has become so important in military, budgetary and symbolic terms for both sides. The U.S. officials took no new proposals to Moscow that would have accommodated Soviet objections to Reagan's cherished Strategic Defense Initiative. They found a Soviet leadership unwilling to relent on its opposition to SDI, unwilling to move further on offensive arms in the absence of a space defense deal and also apparently unwilling to paper over the differences on this fundamental issue.
The Geneva negotiations on nuclear and space arms recessed yesterday at least until January with no sign of further progress toward agreement, according to administration officials. Any further exchanges to prepare for the summit are likely to be limited to diplomatic exchanges through the embassies in Moscow and Washington.
On the big issues, administration officials say, they now hope that the first face-to-face discussion of the U.S. president and the Soviet Communist Party chief in nearly 6 1/2 years will at least "start a process" of dialogue. On the theory that talking is better than not talking, they say, this could turn out to be a modest plus toward eventual better understanding. But it would hardly fulfill the high public expectations for the summit here, in the U.S.S.R. and elsewhere in the world.
There remains a chance, of course, that the mood could change again in the next two weeks, and that prospects might brighten. Senior U.S. officials continue to hold out the possibility that there yet may be a few positive surprises in Geneva.
But all the indications today are that these will come, if they do, on relatively minor matters -- renewal of the lapsed U.S.-Soviet commercial aviation agreement, for example, or the long-delayed opening of consulates in Kiev and New York, or renewal of a lapsed agreement for cultural and educational exchanges. And the administration says the Soviets will have to move off their present positions to make progress even on these matters.
Two bilateral steps were announced yesterday by the Pentagon: the scheduling for next week of the annual meeting of Soviet and U.S. naval officers to discuss dangerous incidents at sea and the first test transmission of documents over a new facsimile device attached to the 22-year-old "hot line" between the two capitals.
The "incidents at sea" meeting, originally scheduled for June, was canceled amid the bitter feelings provoked by the fatal shooting of a U.S. Army major in March by a Soviet sentry in East Germany.
A glimmer of light still exists here for symbolic advances in Soviet human rights practices, especially permission for the emigration of additional Soviet dissidents or Soviet Jews, before or shortly after the summit.
One basis for this hope is the unexpected Soviet decision to grant an exit visa for medical treatment to Yelena Bonner, the wife of Andrei Sakharov, a move U.S. officials considered a significant concession. Another reason for hope was the unusual willingness of Soviet Foreign Minister Eduard Shevardnadze to engage in a two-hour human rights discussion last Monday with Shultz, and Gorbachev's willingness to discuss the issue again on Tuesday.
But another Pentagon announcement yesterday was a reminder of the depth of the gulf still separating the superpowers. The Defense Department said it has chosen a contractor -- Lockheed Corp. -- to build a new antiballistic missile that could intercept incoming warheads.
This large step in the so-called "Star Wars" development program that so upsets the Soviet Union is permitted under the 1972 Antiballistic Missile Treaty because it is a fixed, land-based system.