With the Union Jack flying in Jerusalem's streets for the first time in nearly four decades, British Prime Minister Margaret Thatcher received a warm welcome tonight at the start of a three-day visit, the first ever made to Israel by a prime minister of Britain.

Thatcher, who was met at Tel Aviv's Ben-Gurion Airport by Israeli Prime Minister Shimon Peres and other senior Cabinet ministers, said she was concerned that initiatives for a comprehensive Middle East peace settlement had lost momentum in recent months. She promised to discuss with Israeli officials how Britain could help achieve "peace with security for Israel and for the other peoples of the region."

Of the breakdown of efforts to attain a joint Jordanian-Palestinian dialogue with Israel, Thatcher said, "I do not believe that is your wish or that of the moderate and far-sighted Arab leaders with whom I have talked in recent months. I hope that we shall be able to explore together practical steps which can be taken to build confidence where there is now distrust and suspicion."

Israeli and British official sources indicated, however, that Thatcher was carrying no specific new initiatives for Middle East peace, and said that her talks with Israeli officials will be of a general nature.

The British prime minister is expected to bridge years of disagreement between the two governments on such issues as Israeli occupation policies and British arms sales to Arab states by focusing on the need for cooperation in fighting international terrorism.

A senior Israeli Foreign Ministry official, briefing foreign journalists before Thatcher's arrival, said, "This is a very important visit from our point of view, and the timing makes it even more important, given the personal commitment of Thatcher against terrorism."

Israeli sources said that no specific proposals for joint action against terrorism are likely to emerge from the visit.

Thatcher arrived aboard a special Royal Air Force passenger jet equipped with antimissile devices, and was met with extraordinary security measures.