The Reagan administration is nearing agreement with Israel on military assistance next year at the current level of $1.8 billion, plus an increase of about 5 percent to compensate for inflation, Israeli Defense Minister Yitzhak Rabin said yesterday.
In an interview with The Washington Post, Rabin said tentative accord to request that amount from Congress for fiscal 1987 was reached in talks here this week with Defense Secretary Caspar W. Weinberger and Secretary of State George P. Shultz.
He added that the agreement requires White House approval.
For fiscal 1986, which began Oct. 1, Israel is receiving $1.8 billion in military aid and $1.2 billion in economic assistance. In addition, Congress approved a special supplemental appropriation of $1.5 billion spread over the 1985 and 1986 fiscal years to help Israel overcome economic problems.
Referring to hopes of reviving the Middle East peace process, Rabin reiterated Israel's offer to King Hussein of Jordan for direct talks with a joint Jordanian-Palestinian delegation provided that the Jordanian members are not self-declared members of the Palestine Liberation Organization.
He also said he believes that Israel would agree to Hussein's call for "an international umbrella" to launch the process but only on condition that other countries that might participate, such as the Soviet Union, "will not interfere with what have to be direct bilateral talks between Israel and Jordan.
"Under those conditions, I can live with it," Rabin said. "I wouldn't see such international auspices as an obstacle to starting negotiations."
In terms of future progress, Rabin said "the ball is in Jordan's court." He added that Israel believes that Hussein, who has agreed to seek a role for the PLO in any talks, is awaiting PLO Chairman Yasser Arafat's response to three demands the king reportedly made during their recent meeting in Amman.
Rabin said Hussein wants Arafat to declare that the PLO will cease its terrorist activities, publicly accept U.N. resolutions that effectively recognize Israel's right to exist, and declare a readiness to negotiate with Israel about a resolution of the Palestinian problem.
In addition, he said, Israel believes that Hussein is waiting to see whether the Geneva summit meeting next week between President Reagan and Soviet leader Mikhail Gorbachev will produce any results that might affect the Mideast peace process. Rabin also said recent moves by Jordan to improve its relations with Syria, which opposes peace talks, have added a factor whose potential effects are not yet clear to Israel or the United States.
Rabin also said that Israel's efforts to protect its northern borders against terrorist attacks from Lebanon by maintaining a security zone policed by Israeli-controlled Lebanese forces "have proved to be more successful so far than we had expected."
He noted that in the past four months 13 suicide car bomb attacks have been committed by Moslem extremists on the northern edge of the security zone. "Without the existence of the security zone, those cars would have blown up on or inside our border," he said.
Earlier yesterday, in a speech to the Georgetown University Center for Strategic and International Studies, Rabin said that "maneuvering room" for possible peace talks is being created by the Iranian-Iraqi war. He said the war had caused a shift in Arab world alliances.