Antonio Badini, Prime Minister Bettino Craxi's foreign policy adviser, testified today that Italy allowed Mohammed Abbas, accused mastermind of the hijacking of the Achille Lauro cruise ship, to leave the country because at the time it believed he was only a mediator and the United States had submitted insufficient proof to justify his arrest.

Badini said that, in addition, Egypt had strongly pressed for Italy to release Abbas, insisting that the intercepted plane carrying him and the suspected hijackers had been on an official Egyptian mission and thus enjoyed diplomatic immunity.

The Italian official testified in the trial in Genoa of 15 persons -- 10 of them being tried in absentia -- for the hijacking of the ship last October and the murder of an American passenger, Leon Klinghoffer.

Italy's decision to release Abbas was bitterly protested by the United States at the time, and almost caused the collapse of the Craxi government.

Badini insisted today that when Italy allowed Abbas to leave, the United States had offered only unprovable, circumstantial evidence of his involvement in the hijacking.

It consisted, Badini testified, only of information that there was an "affinity" between the hijackers and Abbas -- which, Badini said, "we already knew" -- and allegations that the radio conversation Abbas had with the hijackers at sea, when he told them to surrender, constituted proof he was involved because they knew him.

Badini said it was only later that Italian authorities had enough proof of Abbas' complicity to issue an international arrest warrant for him. By then he was gone -- first to Yugoslavia, then to the Middle East, where he reportedly has been seen in several countries.

Abbas, 37, leader of the Palestine Liberation Front, a faction of Yasser Arafat's Palestine Liberation Organization, was in Italian jurisdiction for more than two days last October after an Egyptian airliner carrying him, an aide, and the suspected hijackers was forced by U.S. warplanes to land at a North Atlantic Treaty Organization base on Sicily. The Egyptian plane was taking the group to Tunis where the PLO had said it would put the hijackers, who had surrendered in Egypt, on trial.

"We knew at the time only that Abbas had offered his good offices to end the hijacking as a sort of intermediary," Badini testified, to explain why Craxi sent him to interview Abbas as he sat aboard the U.S.-intercepted Egyptian plane.

"Abbas was sent by Arafat to Port Said Egypt to persuade the hijackers to surrender," Badini testified. "Arafat had been convinced the hijacking was designed to sabotage efforts to negotiate a Middle East peace, that it was against the Palestinian cause."

"The essential thing was that Arafat had sent emissaries to negotiate the surrender, and it was Arafat who told us one of these emissaries was Abbas," Badini said.

He said Abbas identified the hijackers as "his men" -- that is, members of the PLF -- but denied having any advance knowledge of the hijacking.

Italian prosecutors now contend, however, that their interrogations of the four accused hijackers have established that Abbas was the organizer and leader of the hijacking.

In other testimony today, the Achille Lauro's captain, Gerardo de Rosa, testified that two of the accused hijackers, Magid Molqi, 23, and Bassam Ashker, 18, had come to him on the ship's bridge bearing passports of two American passengers -- Leon Klinghoffer and Mildred Hodes.

De Rosa said the two hijackers made him understand that they had already killed Klinghoffer and would kill Hodes next.

"I was convinced they were going to kill more people," the captain told the court. "I said instead of killing everybody they could kill just one person -- the commander of the ship."

Then, however, Abbas called the hijackers by radio from Egypt using a code name, Abu Khaled, and ordered them to give up.