Israel Joins Mideast Talks on Economy : Commerce: Officials, business leaders from 60 nations seek to convert peace into prosperity. Christopher offers U.S. plan for region.

CASABLANCA, Morocco —  With Israel and its Arab neighbors steadily chipping away at half a century of war and hatred, government officials and business leaders from more than 60 nations gathered Sunday at Morocco’s royal palace to search for ways to convert peace into greater prosperity for the region.

“There is no reason why the economic miracles that are transforming parts of Asia, Eastern Europe and Latin America cannot also transform this region,” U.S. Secretary of State Warren Christopher told the opening session of the Middle East and North Africa Economic Summit.

“I can foresee a day when the 300 million people of the Middle East and North Africa, so long held back by strife and hatred, can finally join the mainstream of international commerce,” he said.

Christopher, seated next to Palestine Liberation Organization leader Yasser Arafat, outlined a four-point U.S. plan to stimulate investment, trade and tourism in a region where war and hostility have often built impenetrable economic barriers between the closest of neighbors, costing billions of dollars a year in lost production.

Although he did not include it in the four-point plan, Christopher also called for an end to the Arab economic boycott of Israel. He said the boycott has virtually collapsed and no longer has much economic impact but said, “We want to have a formal recognition that the boycott has come to an end.”

U.S. officials said the conference probably will urge the Arab League to repeal the boycott. With most league members represented in Casablanca, such an appeal would probably carry substantial weight.

The conference, attended by 10 heads of state or government, 60 Cabinet ministers, more than 400 other government officials and--probably most important--more than 1,000 business people, amounts to a coming-out party for Israel, which only a few years ago was not welcome at large Arab-dominated regional meetings.

Israeli Prime Minister Yitzhak Rabin, in an often-emotional review of Israel’s struggle for peace and sovereignty, said the conference, attended by virtually all Arab governments, provides an “opportunity to talk to one another, to know one another.”

He said peace must be “translated into a better life for every citizen,” adding, “Poverty is the fertile ground for the growth of Hamas and Islamic Jihad,” two radical Islamic terrorist organizations and sworn enemies of Arab-Israeli rapprochement.

Christopher said the meeting reflects “the growing acceptance of Israel in the Middle East” almost 50 years after the Jewish state was born in a bloody struggle against the surrounding Arab countries that wanted to expel it from the region.

Israeli Foreign Minister Shimon Peres told reporters: “This conference opens a new chapter in the outlook and in the destiny of the Middle East. Until now, we were basically solving problems of the past and putting an end of the conflicts of yesterday. We are trying now to build a new economic structure in the Middle East so people will feel the benefits and taste the fruits of peace.”

In his speech, Christopher described the steps that Washington believes will rebuild the regional economy and produce greater growth than the Middle East has enjoyed this century:

* Elimination of most existing tariffs and other trade barriers to permit “the free movement of goods, capital, ideas and labor across the borders of the Middle East and North Africa.”

* Creation of a Middle East and North Africa Bank to finance projects across the region. U.S. officials said the bank’s capital would come from the United States, Japan, the European Union and others, including Mideast countries that hope to obtain loans.

* Establishment of a regional tourism board to promote visits across the region, such as package tours for Americans, Europeans and others that would combine attractions such as the religious shrines in Jerusalem with the archeological sites in Arab countries like Jordan and Egypt.

* Development of a regional business council to integrate trade relations and commercial opportunities throughout the region.

If the conference approves the program as expected, U.S. officials said Washington will contribute some of the money but that most of it will have to come from other governments and the private sector.

Talking to reporters on the flight from Riyadh, Saudi Arabia, to Casablanca, Christopher said the peace process will succeed only if it produces “the economic benefits which will show the people that peace is not just a sterile concept but that it portends positive things in their lives.” He said only private investment can produce the kind of economic clout that the region needs. But he said business people cannot be expected to invest until the region overcomes the war and instability that have marked it for so long.

Peres agreed that private money is the key. “Governments have policies but no money; companies have money but no political goals,” he said. “At this conference, we want to bring the two together so that the companies invest in the projects that interest them, that appear to them to be profitable, and the governments provide the policy direction and the guarantees the businesses need to proceed.”

U.S. officials say much of the money must be generated within the region, with rich countries such as Saudi Arabia and the other monarchies along the Persian Gulf contributing much of the capital. But Arab states also fill out the lower end of the economic scale. Israel, once among the region’s poor, has established itself in the middle.

Peres said Israel is prepared to help some of its poorer neighbors. “We do not think that Israel should remain an island of prosperity in a sea of poverty,” he said. “We think that the better off our neighbors are, the better off we will be. Poverty, want and desperation contribute a lot to the tensions, the conflict and the terrorism in the region.”

On a related subject, Christopher dismissed as “public posturing” the complaints of some Israeli officials that President Clinton obtained almost nothing new in his Damascus meeting last week with Syrian President Hafez Assad. At the time, U.S. officials said the Clinton-Assad talks produced small but significant advances in the painfully slow Syria-Israel peace negotiations.

“This is a very intense negotiation with very difficult issues, and both parties are conducting themselves in public in a way to maximize their negotiating position,” he said. “I don’t find it surprising that either party would tend to downplay any concessions they might have received. . . . That’s just part of this very, very tough negotiation.”

Peres seemed to agree. He said Clinton’s trip was worthwhile because as long as “Syria remains in the orbit of negotiations, then Syria should be in the orbit of visits.”

The conference, nearly two years in the planning, is sponsored by the World Economic Forum of Geneva and the Council on Foreign Relations in New York under the patronage of King Hassan II of Morocco.