An article yesterday should have noted that an American Arab group's spokesman cited U.S. news accounts when he said the Palestine Liberations Organization was "playing catch-up" with spontaneous demonstrators. (Published 12/24/87)

American Jewish leaders, expressing increased concern over two weeks of unrest in Israel's occupied territories and at least 21 Palestinian deaths, said yesterday that continued violence between Israeli soldiers and Palestinian demonstrators could demoralize the Jewish community here and erode American support for Israel.

Several Jewish leaders, while agreeing that a long-range negotiated solution is needed to improve relations between Arabs and Jews in Israel, acknowledged internal divisions over what should -- or could -- be done to defuse the situation.

Morris B. Abram, chairman of the conference of Presidents of Major American Jewish Organizations, said the violence had been "planned, instigated and incited by Palestinian terrorists led by the PLO {Palestine Liberation Organization} and Moslem fundamentalist groups" and that "in the short range, order must be restored lest anarchy triumph."

Abram, who called for long-range negotiations and praised Israel for trying to "react with restraint," said "those who plan the riots must understand that they cannot change the political situation by violence."

Seymour Reich, president of B'nai B'rith International, said one cause of the rioting was "frustration at Israel for its continuing occupation of territories that have a majority of Palestinian residents."

But Reich said that until there are negotiations, "Israel should not be panicked into hasty actions that will serve neither peace or security and Israel's friends should hold a steady course, recognizing that violence, however regrettable, cannot be the basis for progress."

Rabbi Alexander M. Schindler, president of the Union of American Hebrew Congregations, said the violence, spilling over for the first time to Israel's Arab community, "should shock Israel's government into realizing that a tense political situation cannot continue indefinitely without some kind of movement, whether it be violent, as we are now witnessing, or peaceful, in the form of political accommodation.

"Israel simply cannot sit in the territories and wait for peace to come," Schindler said. "The status quo sows the seeds of endless conflict . . . and it is a time bomb ticking away at Israel's vital center."

One Jewish leader, who asked not to be identified, said the Israeli government "has gotten the message about how concerned the Jewish community and the American government" are about use of live ammunition by Israeli forces.

Despite that, he said, "the internal political fighting {in Israel} will be about who is tougher," not over negotiation tactics. Israeli supporters here are "close to demoralization and there is no consensus over what to do," he said, "only hope that the coalition government can go beyond the iron fist and not just quell the violence but find someone to talk to" for a long-range solution.

"We hope for a reduction in violence in the coming days," said Hyman Bookbinder, a spokesman for the American Jewish Committee, adding that pictures of "Israeli soldiers roughing up the Palestinian kids" were "tragic news."

"If there are any Israelis who still don't realize how grave the situation is in the occupied territories," he said, "they now know it." Israelis are "sick at heart" over the violence; "it's very difficult for them to accept, but they are not going to ask for total withdrawal" from the occupied territories and "we don't expect the Israelis to run."

Bookbinder said the administration's statements yesterday criticizing Israel's tough tactics were one-sided. "The appeal has to be addressed to more than Israel," he said. The administration needs to "address the {Arab} political and religious leaders who are egging on the rioters."

Abram said Israeli forces use live ammunition "only in self-defense and only after firing warning shots in the air. Any attempt to equate those who are causing the violence with those who are seeking to stop it is unacceptable."

But Faris Bouhafa, spokesman for the American-Arab Anti-Discrimination Committee, said the administration's reaction and statements so far "have been very timid. Unless the United States uses its political and economic leverage to force Israel to sit down at negotiations, Israel will continue to believe that it doesn't have to . . . and Palestinians will become more and more convinced that the U.S. is their enemy as well."

Bouhafa said Arab-American reaction to the violence was "predictable, they were outraged. But another sentiment seems to be gaining ground," he said. "A lot of people are upset that these kids are being killed. There's a real sense of sadness. That's combined with a certain sense of elation that the Palestinians are showing such bravery and such courage in the face of overwhelming military force."

Bouhafa said that "while nobody wants this violence to continue, one must have a certain admiration for these kids. This is the first uprising by a very special generation of Palestinians" who were "born and raised under Israeli occupation. It shows they are unwilling to put up with the repressive policies they have known since birth."

Asked about allegations that the riots were organized, Bouhafa said, "The idea that the PLO is behind this is ridiculous. The PLO is playing catch-up to the events. This is a popular uprising in the truest sense.

"This is not going to go away," Bouhafa said. "Two months ago the time bomb was in storage, now the fuse has been lit."