Despite five days of talks, Palestine Liberation Organization officials led by Yasser Arafat and Jordanian officials led by King Hussein have failed to agree on how to secure a role for the PLO in the Middle East peace process, a well-placed Palestinian source said today.

The main sticking point, he said, has been U.N. Security Council Resolution 242, which calls for Israel's withdrawal from the Arab lands it occupied in 1967 and the right of the Jewish state to exist within secure boundaries.

The PLO says that it has refused to accept the resolution, which was passed in 1967, because it makes no reference to the Palestinians or their national rights.

In response to Jordanian insistence during meetings earlier this week that the PLO recognize Resolution 242 in exchange for invitation to an international Middle East peace conference, the PLO formulated a counterproposal, which was passed on to King Hussein to convey to Washington, the Palestinian source said.

The PLO proposal suggested a U.S. statement calling for "an effective international Middle East peace conference and the right of the Palestinians to self-determination within the context of a Jordanian-Palestinian confederation," the Palestinian source said.

In exchange for that statement, the PLO proposed that it would endorse Resolution 242 publicly, the source added.

During a meeting yesterday with Arafat, Hussein produced a State Department message rejecting that proposal, the Palestinian source added.

"The Jordanian side has been repeatedly demanding that we should accept Resolution 242 without any qualifying statements, and we have continued to refuse," said the source.

Although Arafat and other senior PLO officials accompanying him on his current visit were scheduled to remain until Saturday, PLO officials indicated that the formal talks have ended. Behind-the-scenes contacts were continuing, however, and PLO officials have not ruled out that they could produce some last-minute breakthrough.

The Palestinian source repeated the frequently stated PLO line that the Jordanian-PLO agreement of last February was the utmost concession the PLO could offer. It makes no explicit mention of an independent Palestinian state and calls for Palestinian self-determination "within the context of a Jordanian-Palestinian confederation."

"When we signed that agreement, we were assured by the Jordanians that it was the last concession we would be required to make, and that the peace process would begin within three to six months," the Palestinian source said.

The agreement calls for an Arab-Israeli settlement on the basis of all relevant U.N. resolutions, although it makes no mention of Israel by name or of Resolution 242.

Another problem that has beset the talks, according to the same Palestinian source, has been the proposed international peace conference. The PLO says it is unfair that it should be asked to endorse Resolution 242, which it considers its last bargaining card, in exchange for an invitation to a conference that may never take place.

Based on a meeting between Arafat and the Soviet ambassador in Amman and a visit to Moscow earlier this month by PLO spokesman Farouk Kaddoumi, the PLO reportedly came to the conclusion that the Soviet Union is not convinced that the United States is seriously considering such a conference because Washington has not raised the issue with Moscow.