For the first time, the Chinese government has made two proposals for settling the 11-year-old civil war in Cambodia, raising prospects for ending the fighting but also generating concern that the initiatives could perpetuate communist rule, U.S. and diplomatic sources said yesterday.

Intensified diplomatic developments, centering on discussions between China and its hostile neighbor, Vietnam, may bring the first major change in the Cambodian situation since the withdrawal of the Vietnamese army last September. The developments were a major topic of discussion yesterday between President Bush and visiting Thai Prime Minister Chatichai Choonhavan, who both pledged to pursue a "comprehensive" peace in Cambodia through "free and fair elections under United Nations auspices."

The unannounced Chinese proposals, according to the sources, were presented May 8 to Vietnamese Deputy Foreign Minister Dinh No Liem in an unusually high-level meeting in Beijing to discuss Cambodia. The proposals were repeated in writing by China several days later to representatives of the United States, the Soviet Union, Britain and France in a Cambodia-related meeting in New York.

A visit to Hanoi this week by Chinese Deputy Foreign Minister Xu Dunxin to discuss the proposals ended yesterday with "no progress" being made, according to a report by the official New China News Agency. Xu's visit was the first by a senior Chinese to Hanoi since the two nations fought a brief war in 1979.

Despite the seeming setback, Chatichai said after his meeting with Bush that China and Vietnam "should try again" to resolve the differences at the heart of the Cambodia war. "We wait for 11 years -- why not a few {more} months?" said Chatichai in an interview.

The Thai leader said his government has not replied to a Chinese request that Thailand convene a meeting of China, Vietnam, Laos, Indonesia and itself to seek a regional solution to the war. Earlier, Chatichai said, he had suggested a three-way meeting of Thailand, China and Vietnam to seek regional accords.

"The Chinese want to cut a deal," said a source close to Chatichai in evaluating the proposals from Beijing. A U.S. official said China's decision to initiate moves toward settlement of the war may reflect a desire to improve its sagging international standing as well as a belief in Beijing that Vietnam is in a weaker position than before and may be forced to accept terms close to those which the Chinese desire.

Chatichai expressed great optimism about the chances for an end to the Khmer fighting, saying that "I believe peace will come back to Cambodia very soon" if arms supplies to the Khmer Rouge guerrillas can be stopped.

U.S. and diplomatic sources said the Chinese plans revolve around creation of a power-sharing arrangement in Phnom Penh involving two groups of six representatives each to comprise a Cambodian Supreme National Council (SNC). One group would represent the Vietnamese-backed Phnom Penh government, the other group the coalition of the two non-communist guerrilla factions and the Chinese-backed Khmer Rouge guerrillas. The non-communist former head of state, Prince Norodom Sihanouk, would be head of the SNC but U.S. officials said it is unclear whether Sihanouk would be empowered to break tie votes or have real authority.

The sources said the Chinese have presented two alternative ways to employ the Supreme National Council, saying Beijing could accept either one:

A strong SNC to run Cambodia on an interim basis with a relatively weak role for the United Nations. U.S. officials expressed concern that, under this option, the Chinese-backed Khmer communists and the Vietnamese-backed Khmer communists, now bitter enemies but originally part of a single movement, could squeeze out the militarily weaker non-communists.

A weak SNC working with a relatively strong United Nations interim administration that would organize free elections. The United States "very strongly" believes that United Nations involvement in major fashion "would create the greatest prospects for a stable political outcome" in Cambodia, Assistant Secretary of State Richard Solomon said at a White House briefing in which he obliquely referred to the two-part Chinese proposals.

Chatichai asked Bush in yesterday's meeting to use U.S. influence to persuade China to stop its supply of arms to the Khmer Rouge, who are blamed for the deaths of more than 1 million Cambodians during their 1975-78 rule. "If the United States and Japan try to do that {use their influence}, I believe the Chinese will stop," Chatichai said.