Syria Refuses to Budge on Talks : Mideast: Assad remains at odds with Israel on key points for a peace conference. After rebuff, Baker meets with Soviet Foreign Minister Bessmertnykh in Cairo.

CAIRO — Syrian President Hafez Assad refused to budge on two key procedural issues during almost six hours of talks Sunday with Secretary of State James A. Baker III, raising serious doubts that a proposed Middle East peace conference will ever get under way.

A senior U.S. official said the status of the negotiations after the Baker-Assad meeting in Damascus is “essentially the same that we came in with last night” when Baker arrived from Washington.

The official, who declined to be identified by name, said the negotiations are snagged on Syria’s demand that the United Nations play an important role in the proposed conference and that the meeting must be able to reconvene from time to time to mediate disputes between Israel and the Arab parties. Israel rejects both points.

“On those two issues, I didn’t see any particular progress (in Damascus), and I don’t expect to see any progress on those two issues when we get to Jerusalem,” the official said, adding somewhat wanly, “Maybe we will get lucky.”

When the official was asked why Baker did not break off his fourth trip to the Middle East in two months and admit that differences between Israel and its Arab adversaries are irreconcilable, the official said the secretary of state has appointments in Cairo and Jerusalem and it would be “dishonorable” to break them. But he did not object when reporters suggested that Baker was “stiffed” in Damascus.

After his talk with Assad, Baker flew to Cairo for meetings with Egyptian officials and Soviet Foreign Minister Alexander A. Bessmertnykh, who is in Egypt on his own Middle East visit. Washington and Moscow have agreed to co-sponsor the proposed conference, and both Baker and Bessmertnykh are trying to encourage Arab and Israeli participation.

Baker goes to Jordan and Israel on Tuesday. He is scheduled to return to Washington on Thursday.

Although the senior U.S. official stressed that both Syria and Israel have been intransigent, he offered an oblique hint that a limited conference could be held even if Syria refused to participate.

Asked if Syria could be left out, the official said, “That is very speculative and hypothetical, and I’m not in a position to answer that one right now.”

As another possible fallback position, the same senior official said Saturday that the conference could begin with separate talks on water resources, arms control, environmental protection and other single-issue topics if no agreement can be reached on an overall Arab-Israeli peace conference. He said such an “outside-in” procedure is an option “if you can’t do any better than that.”

Nevertheless, Baker’s initiative seems to hang by a thread despite the boost that it received Saturday when the six-nation Gulf Cooperation Council, led by Saudi Arabia, agreed to send its secretary general to the conference as an official observer. The six nations also said they would participate in separate talks on regional issues.

In Jerusalem, Israeli leaders showed little enthusiasm for the agreement by the six Persian Gulf states, the Associated Press reported. The Israelis said the step was not bold enough.

Foreign Minister David Levy said that while it was at least a sign of progress, Israel wants “not only part of the Arab states but all the Arab states” to enter direct negotiations.

Prime Minister Yitzhak Shamir’s top adviser, Yossi Ben-Aharon, said the Gulf states’ decision “contributes nothing to the peace process.”

Baker had hoped to use the Gulf council announcement as a lever to bring about Syrian participation. But that strategy appears to have fallen flat. Assad, who opposed Saudi participation in the first place, yielded nothing even after the Gulf council announcement.

The Syrian government newspaper Tishrin said in an editorial Sunday that Washington has more at stake in the current situation than Syria does.

“There is no doubt that wasting the current opportunity for implementing comprehensive peace in the region does not jeopardize . . . countries directly concerned with the Arab-Israeli conflict, but it jeopardizes American credibility and affects international security, peace and detente,” the editorial said.

Nevertheless, Baker sought to put a positive gloss on the negotiations when he got to Cairo.

Talking to reporters after a two-hour meeting with Bessmertnykh on Sunday night, Baker said, “I don’t think we have reached an impasse that can’t be bridged.”

Asked to cite areas of agreement, Baker said that both Israel and the Arab parties have agreed to seek a comprehensive settlement under the terms of U.N. Security Council Resolutions 242 and 338.

“The parties will interpret those resolutions in different ways,” he said. “The point of the negotiations is to determine the exact meaning of 242.”

The resolution, adopted after the Arab-Israeli War of 1967, calls on Israel to return occupied territory. The Arab states maintain that the resolution requires the return of all territory, while Israel insists that it has already complied by returning the largest tract of land, the Sinai Peninsula, to Egypt.

Before going into his meeting with Bessmertnykh, Baker said that agreement has been reached on many procedural points while “one or two things--really only one or two--maybe three” remain in dispute.

Nevertheless, the conflicts over the role of the United Nations and the future of the conference are matters that Baker earlier had called “deal-breakers.”

The senior official said that a controversy over the nature of the Palestinian delegation to the conference appears to be on the way to resolution, although it is not completely settled. He declined to provide any details of the possible deal.

Although the official said it is too early to decide if Baker will return to the region after his current trip ends, he implied that the secretary of state is becoming increasingly discouraged.

“At the end of this trip we will know exactly what separates the parties--exactly--and then we will determine what the next steps are--that’s the name of the game,” the official said.