PLO Moderates Its Peace Talks Position : Mideast: It will settle for a halt in Jewish settlements and an indirect role in selecting delegates, sources say.

ALGIERS —  The Palestine Liberation Organization is preparing to give tacit endorsement to Palestinian participation in a Middle East peace conference, if there is an immediate halt to Jewish settlements in the occupied territories and at least an indirect role for the PLO in selecting a delegation to the talks, Palestinian sources said Thursday.

The Palestine National Council is also expected to seek assurances that the status of Jerusalem will be included in the talks and a clear statement from the United States that it favors some form of self-determination for the Palestinians, perhaps through a confederation with Jordan, the sources said.

Although the PLO’s ruling Palestine National Council is not expected to issue a clear acceptance to the talks when it votes today, moderates on the 480-member council say they expect to give PLO Chairman Yasser Arafat implied authority to proceed under the limitations included in their resolutions.

“We are on the verge of approving it,” said a member of the PLO’s governing council who helped draft the measure scheduled for consideration today. “We’re trying our best not to block the peace process, and the last thing we would like to do is to be the ones who prevented the peace conference from happening.”

The final resolution was expected to be finalized overnight and presented to the PLO member organizations and finally to the full Palestine National Council for a decision. PLO sources said the vast majority of PLO member groups appeared to have moved behind the resolution by Thursday afternoon.

Palestinian radicals have strongly opposed participating in the U.S.-Soviet-sponsored peace conference and have instead urged an escalation of the Palestinian uprising in the occupied West Bank and Gaza Strip.

It is likely that the radicals will present a competing resolution seeking to veto participation in the peace conference. But its support is likely to be limited to Damascus-based Palestinian leader George Habash’s Marxist Popular Front for the Liberation of Palestine, along with some independent PNC members, conference delegates said.

In an interview Thursday, Habash complained that Palestinians had gained nothing by their commitment to the peace process and said Israel will be forced to withdraw from Arab lands “only with economic and human and material losses” brought about by an escalation of the uprising, or intifada, and the convening of an internationally sponsored peace conference.

But PLO sources said they expect a resolution allowing future Palestinian acceptance of the peace conference to win passage. The most controversial point, delegates said, has been the precise phrasing of how positively or negatively to approach the peace conference itself.

That a variety of delegates expect to pass a resolution implicitly allowing participation in the conference indicates that Arafat’s call for moderation is winning. Yet the spirit of the debate--and the controversy over how strongly to endorse the peace conference--makes it clear that many Palestinians still have grave reservations over going to the conference table under what many believe are Israeli terms.

Israel has refused to negotiate directly with the PLO, which it regards as a terrorist organization, and it has vetoed Palestinian delegates from East Jerusalem because it believes that would put the status of Jerusalem into question. Israel annexed East Jerusalem after it captured the Arab part of the city from Jordan in 1967. It now regards all of Jerusalem as Israel’s united capital city.

The PLO has fought to maintain an active role in the peace process, but after four days of talks here, it appears that many members will be content to play a behind-the-scenes role in naming Palestinian delegates to avoid a direct confrontation on the issue.

But most delegates said the PNC would stand firm on Jerusalem, insisting that its status be included in the talks, and, some delegates said, insisting on the right to appoint Palestinian negotiators from East Jerusalem to the talks.

PLO moderates appear to think that a behind-the-scenes role for the PLO can be finessed. Faisal Husseini and Hanan Ashrawi, two West Bank Palestinians who have met recently with Secretary of State James A. Baker III, for example, have made no secret of their PLO loyalty. Husseini and Ashrawi reported on their Baker meetings to the PNC Wednesday night, although officials here have officially denied their presence in deference to an Israeli law barring direct contacts with the PLO.

Delegates who met with Husseini and Ashrawi say there are indications that Washington is prepared to accept the Palestinians as equal partners in a delegation with Jordan, and not simply as representatives in a Jordanian delegation, a sore point that many Palestinians said would have blocked their endorsement of the talks.