King Hassan II of Morocco announced today that he is resigning as president of the 21-nation Arab League because of the protest within the Arab world over his meetings last week with Israeli Prime Minister Shimon Peres.

In a letter to the league's secretary general, Chadli Klibi, Hassan said he had "taken notice" of the reactions and feelings in "certain Arab capitals" over his controversial meeting with Peres and did not want to stand in the way of calling a special summit meeting of the organization to consider his action.

"We have decided to put an end to our presidency of the Arab summit conference so that neither with regard to this conference nor as a host country can the kingdom of Morocco constitute an obstacle in the path of the Arab summit process," he said in his letter, released by the official Moroccan news agency.

The king's decision follows sharp criticism by Algeria, Syria, Libya and the Palestine Liberation Organization of his meeting with Peres. Syria alone so far has broken diplomatic relations over the incident.

Egyptian President Hosni Mubarak is the only Arab leader to have spoken out strongly in support of the Hassan-Peres meeting. But the leaders of the six moderate states of the Gulf Cooperation Council -- led by Saudi Arabia -- as well as Tunisia and Jordan, either have said nothing officially or said they will await an explanation from the king before taking any position.

With the Arab world now more divided than ever over whether and how to deal with Israel, it remains questionable that a special summit meeting called to consider Hassan's action could reach any agreement on punitive measures other than ousting him as Arab League president -- which he has now forestalled by resigning from the post.

The Moroccan monarch has served as president of the Arab League since its last regular summit meeting in September 1982 in Fez, Morocco. Sharp disagreements among Arab leaders over a number of Middle East issues have prevented the next regular summit, scheduled to be held in Saudi Arabia, from taking place. Any extraordinary summit meeting normally would be held in Morocco.

Secretary General Klibi, Iraq and the PLO have called for an extraordinary summit meeting and Hassan has let it be known that he would welcome the opportunity to explain his actions before the entire body. There are disagreements, however, over where the meeting should be held.

The Moroccan leader, meanwhile, is sending special envoys to a number of Arab capitals to explain his actions and outline the proposals put forth by Peres during the meeting regarding a possible Middle East peace settlement.

The king already has said that he did no more than explain to Peres the terms of the Fez plan adopted by the Arab League at its last summit meeting. The plan offers Israel peace and indirect recognition in return for its withdrawal from lands it has occupied since the 1967 Arab-Israeli war.

The plan also backs the PLO as the only legitimate representative of the Palestinian people and demands a role for it in any peace negotiations.

The king said he broke off the meeting after Peres refused to recognize the PLO and to withdraw from the occupied lands.

Washington Post correspondent William Claiborne reported from Jerusalem:

Informed government sources confirmed that Peres presented to Hassan two "working papers" spelling out Israel's official position. Peres, the sources said, stressed to Hassan that these positions were the official policy of the coalition government and not unilateral offers by Peres as Labor Party leader or as an individual. The two documents are said to contain 13 points.

The two key points are:

Until peace negotiations begin, and while they are under way, Israel will not declare its sovereignty over -- meaning annex -- the West Bank or Gaza Strip. This declaration is explicit in the 1979 Camp David peace accords and also in the 1984 coalition agreement that formed the national unity government in Israel.

Peres, upon his return to Jerusalem, would explore the possibility of meeting with "authentic representatives" of the Palestinian people to begin peace talks. Yossi Beilin, Cabinet secretary, explained after today's Cabinet meeting that this does not include PLO members. Cabinet sources said it includes, so far, Hanna Siniora, East Jerusalem editor of the pro-PLO Arabic newspaper, Al Fajr, and Gaza lawyer Fayez Abu Rahme, both of whom had been nominated by PLO Chairman Yasser Arafat in February 1985 to the joint Palestinian-Jordanian delegation to peace talks -- and accepted then by Peres.

Sources here say that after Peres presented the proposals, he and Hassan discussed the two most important issues: whether Israel would withdraw from occupied territories and whether Israel would negotiate with the PLO. When Peres said no to both questions, Hassan called off the talks.