Jordan's King Hussein, lunching on the spacious lawn of his palace here with 19 Middle East-based correspondents, including nine who came from Israel under an unprecedented invitation, today signaled an end to a four-month government campaign of severe press restrictions.

With an urgency akin to a major diplomatic initiative, Hussein's palace had the U.S. Embassy here telex the U.S. Embassy in Tel Aviv on Sunday to urge Israeli-based foreign correspondents to come to Jordan by way of the Allenby Bridge the next morning, even if they did not have visas. They were told they could return the same way, a practice that Jordan has long prohibited.

The unusual invitations came against a backdrop of steadily increasing behind-the-scenes cooperation between Jordan and Israel in a mutual effort to foster alternative leadership in the occupied West Bank among moderate Palestinians not openly affiliated with Yasser Arafat's mainstream Fatah wing of the Palestine Liberation Organization. Fatah's offices here were shut down on Hussein's orders last week following a collapse of relations between him and Arafat.

In his two-hour talk with the correspondents, Hussein made clear his hope for the opening of a dialogue with a representative leadership of West Bank Palestinians, expressed dismay at what he saw as growing political extremism in Israel and said Jordan was concerned about a possible mass migration into its country from the occupied territories if living conditions there are not improved.

He also said he had closed the Fatah offices in part because an "unholy alliance" had developed among the Communists, "a faction of the PLO which existed in Jordan" -- a clear reference to Fatah -- and "the fundamentalist Moslems" -- a reference to the militant Moslem Brotherhood. He charged that this alliance had been behind rioting at Yarmouk University in May and alleged attempts to influence a special parliamentary election in Irbid this spring.

But the main purpose of the visit with the correspondents, palace aides said, was to smooth over animosity that had grown over the past four months and polish Jordan's image as a progressive, prowestern country that -- unlike some of its Arab neighbors -- does not use police-state methods to control the flow of information.

During this period, a number of foreign journalists, after writing articles that government officials took issue with, had been told indirectly that they had been blacklisted and would not be welcome in Jordan.

Several correspondents were briefly detained while reporting on the Yarmouk University protests and on the charges of voting irregularities in Irbid. Some local journalists, mainly Palestinians, were barred from writing for local or foreign newspapers.

Senior government sources said today that when Hussein learned of the crackdown on the press recently upon his return from an overseas trip, he immediately ordered reforms in public relations policy and scheduled today's luncheon and a press conference he held last Saturday.

Foreign reporters based in Amman, who for months had been pointedly ignored by officials, have suddenly found themselves bombarded with invitations for interviews, and local journalists found restrictions abruptly lifted.

"I don't know how long it will last but it's obvious that the king pulled the chain on a few people," said one Amman correspondent.

Hussein told reporters that he feared that if Jordan does not step up its efforts to improve the quality of life for Arabs in the occupied territories, there could be a mass exodus of refugees to Jordan that could lead to problems here.

"Will there be a serious attempt to expel these people?" Hussein asked. "If they lose hope, if they are pushed out, we will have our real problem here. National security is at stake."

While not directly confirming increased cooperation with the Israeli government in encouraging non-PLO leadership in the West Bank, Hussein said a "large silent majority" there had not yet been heard from, and that Jordan "needs to remove from the Palestinians any intimidation of any sort, be it from Israel or any other source."

Hussein said he was concerned that Israel's government was drifting rightward, and that this would lessen the opportunities for peace.

"The position is changing radically," he said. "A more radical position is emerging, a greater attachment to the territory, a greater reliance on force. We certainly hear voices" that are "very, very extreme."