JERUSALEM -- Secretary of State James A. Baker III said yesterday that he will meet with Palestinian leaders today in hopes of hearing "some new and different signals" to reciprocate a limited freeze on Israeli settlements in the occupied territories.
Mr. Baker, who arrived in Jerusalem yesterday, expressed encouragement at the housing stance of the new Israeli government and dangled U.S. support for loan guarantees to Israel as a possible reward.
He said he wanted to see similar steps toward peace by Palestinian negotiators and the other Arab leaders he will visit on his express trip through the Middle East this week.
"I'm quite confident that we will be able to make the point with the Arab countries that we now have a government here [that] is serious about limiting . . . settlement activity," he said after an evening meeting with Prime Minister Yitzhak Rabin.
To underscore that point, Mr. Baker emphasized that his talks in Israel will focus on "how we can move forward" with the issue of guaranteeing loans to Israel to help resettle immigrants.
The U.S. refusal to guarantee $10 billion in loans because of Israel's continued settlement of occupied Arab lands chilled relations with the government of Yitzhak Shamir, who left office last Monday.
But Mr. Baker stopped short of announcing that Israel had met the U.S. conditions to receive the loan guarantees. He noted, "We will continue to have discussions regarding this issue." The Israeli Cabinet formally decided to reapply for the loans yesterday, Israel Radio reported.
The Palestinian leaders Mr. Baker sees this morning will urge him not to endorse the loan guarantees without a full and permanent freeze on all Jewish settlements in the lands occupied by Israel since the 1967 war.
The first act by Mr. Rabin's government was to announce a freeze on new public housing starts. The Cabinet extended that freeze yesterday while all the settlement plans are reviewed. But Mr. Rabin has said he will go forward with projects in East Jerusalem and some "security" settlements along the Jordan Valley and Golan Heights.
After his meeting with Palestinian leaders at the U.S. Consulate in Jerusalem, Mr. Baker has scheduled further talks with Mr. Rabin and the new Israeli Foreign Minister, Shimon Peres. He is to leave Israel tomorrow for Jordan, Syria, Cairo and Saudi Arabia.
"There is clearly a new environment here," Mr. Baker said of his efforts to get the peace talks going. "It's important now that the parties do more than just meet and talk."
Mr. Baker is rumored to be leaving the job of secretary of state to try to rescue the ailing re-election campaign of President Bush. His tireless efforts in the region, which included nine trips to the area last year, resulted in the Madrid Peace Conference last fall. But from there, the talks have made little progress.
Mr. Rabin won election on a campaign of bringing new flexibility and impetus to Israel's side of the negotiating table. He will be leaving Israel practically on Mr. Baker's heels for a brief meeting with President Hosni Mubarak in Cairo.
It will be the first visit in six years by an Israeli prime minister to Egypt, the only Arab nation with which Israel has reached a formal peace.
The new Israeli prime minister has plunged into the peace issue, barely pausing after his June 23 election. In his inaugural speech last week, he offered to meet Arab leaders in Israel or in their nations to further the peace process.
None besides Mr. Mubarak has accepted the offer. Although the response was expected, Mr. Rabin acknowledged yesterday it was "not an encouraging sign."
Mr. Rabin said his offer was not an attempt to circumvent the formal peace talks, the next session of which is scheduled to be held in Rome, although the date has not been set. "We are determined to continue with the peace negotiations within the framework of the Madrid conference," he said.