JERUSALEM -- Palestinian leaders expressed "cautious optimism" yesterday after talks with Secretary of State James A. Baker 3d about plans for a regional peace conference that is becoming a source of tension between the United States and Israel.
The Palestinians said the latest talks, the third session within the last five weeks, were the first to explore in detail the role and makeup of a Palestinian delegation to a peace conference whose format is continually being revised by the United States.
Their latest meeting also was the occasion for Mr. Baker to make explicit his opposition to Israel's expansion of Jewish settlements in the West Bank. According to the Palestinians, Mr. Baker showed them part of a U.S. television news program about the confiscation of Palestinian land, and he reportedly assured them U.S. public opinion would turn against Israel's settlement policies.
"The question of settlements was raised very strongly," said Hanan Mikael-Ashrawi, one of three Palestinians in the delegation and a professor at Bir Zeit University. "We felt there was tremendous receptiveness and compassion."
Mr. Baker sounded less upbeat. "We are going to keep plugging away," he said before leaving Israel for the Jordanian cif Aqaba, on the Red Sea, for his first meeting with Jordan's King Hussein since the gulf war.
A U.S. official told reporters there that Mr. Baker had made limited progress. "As we get closer, the decisions get tougher," said the official, who declined to be identified. "I think that's what you are seeing. These are tough calls and tough decisions."
According to Mr. Baker's latest proposals, a peace conference would involve some but not all Arab states. Participants would be limited to Palestinians and the Arab states neighboring Israel, the U.S. official said, leaving out Saudi Arabia and other gulf nations.
Israeli officials were counting on gulf states offering diplomatic recognition through the regional conference and not having to settle the Palestinian issue first. Arab states bordering Israel include Jordan, Lebanon, Syria and Egypt; Israel and Egypt negotiated a peace treaty in 1979.
Mr. Baker was to travel from Aqaba to Cairo and to leave Cairo today for Jiddah, Saudi Arabia.
In his talks here, Mr. Baker appeared to be on a see-saw with Israeli officials and the Palestinian delegation on opposite ends. Chances of an agreement with one party appeared to go up only when chances of agreement with the other went down since each side has totally different demands.
Israeli officials and Palestinians dispute almost everything except public willingness to attend a peace conference of some kind. The powers, duration and sponsor of a conference remain to be settled, along with the list of what countries would be represented there and who would represent the Palestinians.
This time, the atmosphere was improved between Mr. Baker and the Palestinians a day after relations cooled between the Secretary of State and Israeli Prime Minister Yitzhak Shamir.
Mr. Shamir met with Mr. Baker more than three hours Friday only for the two sides to reach at least a temporary a deadlock.