Israeli and Syrian envoys today held their first face-to-face discussion after President Clinton helped defuse a procedural dispute that erupted just hours after landmark peace talks opened here Monday.

Israeli Prime Minister Ehud Barak and Syrian Foreign Minister Farouk Charaa joined Clinton and U.S. Secretary of State Madeleine K. Albright for an hour-long meeting at the conference center where the two countries are holding their first substantive negotiations since 1996.

Also today, Clinton told reporters before leaving for Shepherdstown that the United States would look favorably on Israeli requests for billions of dollars in aid to help meet the cost of withdrawing from the Golan Heights. Syria has demanded that Israel return the Golan, captured by Israel in 1967, as its main condition for peace.

Today's generally upbeat news marked an improvement over Monday night, when a dispute over the sequence of the negotiations forced Clinton to cancel a planned three-way meeting with Barak and Charaa. The Syrians had wanted to begin by discussing the extent of an Israeli withdrawal from the Golan. The Israelis thought the first items on the agenda should be security arrangements and normalization of relations.

After Clinton and Albright met with each of the Middle Eastern leaders separately Monday night--and Albright met again with Barak this morning--Barak and Charaa agreed to compromise by forming committees to grapple more or less simultaneously with the main issues.

"We have been able to constitute all the relevant committees, and we believe all the issues will be discussed over the next couple of days," said State Department spokesman James P. Rubin. "The procedural hurdle that emerged yesterday has been overcome, and the talks are proceeding."

U.S. officials regard the negotiations, which formally opened in Washington last month, as the best chance for peace between the two countries since the founding of the Jewish state in 1948. But they also have cautioned repeatedly that they do not expect a core agreement to emerge from this first round of discussions.

Rubin described the first face-to-face meeting between Barak and Charaa as "quite productive" and said Clinton and Albright were pleased that the Israeli and Syrian leaders had "reaffirmed their commitment to the process" underway in Shepherdstown. Members of the two delegations planned to meet later in the evening for what Rubin described as an informal, largely social gathering.

Although the talks have no fixed timetable, delegates have been told by U.S. officials to plan for a two-week stay with a weekend break for the Jewish sabbath and Eid al Fitr, the Muslim feast that marks the end of Ramadan. The talks are being held at the Clarion Hotel and Conference Center in Shepherdstown, a picturesque college town and Civil War landmark 70 miles west of Washington.

Any peace agreement is sure to carry a large price tag for U.S. taxpayers. The Israeli newspaper Ha'aretz reported today that Barak had asked Clinton for a $17 billion military assistance package--including Tomahawk cruise missiles--to ensure Israel's security in the event of a Golan withdrawal. That doesn't include money for relocating roughly 17,000 Israeli settlers on the strategic heights above Israel's Sea of Galilee.

While declining to confirm that Barak had made such a request, Clinton acknowledged that "there will be some cost associated with the security rearrangements. . . . As I have made clear, we need to make a contribution, as do our friends in Europe and hopefully some in Asia, to the long-term economic development of a regional Middle East economy."

The president added that "we're attempting to ascertain what the general outlines of the costs would be, over how many years those costs can be spread, and then I will have to do some serious consultation with the congressional leadership before I can do more than say I would support this."

From the American perspective, at least, talk about financial aid is somewhat premature. After arriving here Monday morning, Barak and Charaa could not even agree on the form of the discussions, a matter that was to have been settled during their discussions last month.

Although Rubin declined to provide details, a person who spoke several times today with a member of the Syrian delegation said Charaa insisted on talking first about Israel's willingness to withdraw fully from the Golan. Barak has sought to postpone that discussion until it is clear what Syria is willing to offer in the way of security guarantees--such as early warning posts--water rights and the nature of relations between the two countries.

In the end, Clinton brokered the compromise to form committees to deal separately with all major issues, including the low-grade war between Israeli forces and Syrian-backed guerrillas in southern Lebanon.

"This isn't a giving-in situation," Rubin said in deflecting suggestions that one side or another had softened its demands. "I urge you not to see this as a ping-pong match. This is a peace negotiation, and we are at the beginning."

Staff writer Charles Babington contributed to this report.

CAPTION: In Shepherdstown, W.Va., protesters led by ultra-Orthodox Jews demanded that Israel stop negotiating possible withdrawal from the Golan Heights.