CAIRO, FEB. 16 -- Eight Arab countries allied with the United States in the coalition opposing Iraq proposed a set of sweeping defense and economic arrangements today that they said would improve security in the Middle East after the Persian Gulf War ends.

Foreign ministers of Egypt, Syria and Saudi Arabia -- the three most important Arab members in the allied coalition -- along with the gulf states of Kuwait, Bahrain, Oman, Qatar and the United Arab Emirates, promised "a new spirit of solidarity among Arab countries" in a statement released at the close of a two-day meeting here. Their proposals, which still require formal approval by their governments, constitute the first institutionalized security plan for the postwar period.

"The war has broken china all over the floor of the Middle East," said a senior Egyptian official. "These proposals are designed to help pick up the pieces."

The conference's final statement did not divulge specifics of the proposals discussed. But Arab sources said the ministers had agreed on five main points. These included reaffirmation of their insistence that Iraq withdraw unconditionally from Kuwait, the maintenance of an Arab peace-keeping force in the gulf after the war ends and the establishment of a new development fund with up to $15 billion from the oil-rich gulf states.

The statement pointedly omitted any mention of the Palestine Liberation Organization, which has deeply angered leaders of the gulf states by supporting Iraq. For years, Arab communiques have routinely referred to the PLO as the "sole legitimate representative of the Palestinian people."

The proposed peace-keeping force of at least 10,000 soldiers would consist mainly of Egyptian, Syrian and Saudi troops, which account for most of the Arab forces deployed against Iraq. Western troops in the region would be withdrawn, but officials said Western naval and air forces would remain "over the horizon" to serve as backup in case of a hostile action similar to the Iraqi invasion of Kuwait.

The departure of Western troops would meet the demands of regional powers such as Syria and Iran, which have expressed uneasiness at the prospect of a long-term Western military presence in the region.

Officials said they saw the development fund as an equally important component of regional security after the war. The economic gap between the wealthy gulf states and their poorer Arab neighbors was one of the root issues that Iraqi President Saddam Hussein has sought to exploit to build support for his invasion of Kuwait.

The fund is designed to promote greater equity between rich and poor, officials said. But some acknowledged privately that most of the aid would be channeled to countries like Egypt and Syria that responded to Kuwait's plea for support in fighting Iraq, and not to those like Jordan, Yemen and Sudan that have backed Saddam. The PLO, which has long relied on official aid from the gulf states and remittances from Palestinians working in the region, is also expected to lose out in the distribution of new funds.

The conference reaffirmed the right of Palestinians to self-determination and an independent state and stressed that it wanted this issue addressed as soon as the gulf conflict ends. In addition to omitting any reference of the PLO, today's statement also made no mention of proposals for an international peace conference, a step Israel opposes.

Syrian Foreign Minister Farouk Charaa said his government is still committed to such a conference and denied that the omission of the PLO marked an important shift in policy. "It is up to the Palestinian people to decide who will represent them," he told reporters.

But other officials indicated that the PLO had forfeited their support and damaged the cause of Palestinian self-determination by backing Iraq. "As far as we are concerned, {PLO Chairman Yasser} Arafat is finished," said one Egyptian official. "The question is whether the Palestinians are finished as well."

The conference also proposed limitations on the deployment of weapons of mass destruction in the region, and officials said progress on reductions would have to be linked with a settlement of the Arab-Israeli dispute.

The meeting also revealed some of the bitter divisions the conflict has caused in the region. Officials said Oman, which has sought to stand aloof from the conflict, clashed sharply with Syria and Saudi Arabia behind closed doors over its insistence that the proposals be submitted to the Arab League, which has been split and virtually paralyzed since the crisis began. Syrian and Saudi officials reportedly vetoed the idea.