CLASHES SUBSIDE IN ISRAEL : TWO LEADERS BALK AT MEETING FORMAT.

Byline: Serge Schmemann The New York Times

A tense quiet settled over the West Bank and Gaza Strip on Saturday as the Palestinian police sought to prevent new fighting and U.S. mediators pursued intensive efforts to arrange a meeting between the leaders of Israel and the Palestinians.

For the moment, both sides were reported locked over whether the meeting should be just between Prime Minister Benjamin Netanyahu and Yasser Arafat, as Israel wanted, or also with Egyptian and U.S. participation, as the Palestinians insisted.

Several clashes were reported between Palestinian youths and Israeli soldiers Saturday, but they were not comparable in scope or bloodshed to the gunbattles that flared over the past three days, taking 54 Palestinian and 14 Israeli lives.

In Ramallah in the West Bank and in the Gaza Strip, scenes of some of the bloodiest melees, the Palestinian police, some of whom were shooting at Israeli soldiers this week, prevented throngs of youths from marching on Israeli posts and settlements.

The Israeli chief of staff, Lt. Gen. Amnon Lipkin-Shahak, declared that the situation remained ``very unstable,'' and ``liable to flare up at any moment.'' He warned that two militant Islamic organizations, Hamas and Islamic Jihad, could launch terror attacks.

The Israeli army announced a series of harsh measures to suppress any new onslaughts by the Palestinians.

They included a full ban on movement by Palestinians among their towns and cities and the deployment of tanks and helicopters throughout the West Bank and along the ``green line'' separating Israel from Palestinian and occupied areas. Soldiers were ordered to fire back if they were fired on, from tanks and helicopter gunships of necessary.

Another Israeli officer, Maj. Gen. Uzi Dayan, warned that if violence increased, Israel would send troops into areas controlled by the Palestinian Authority of Arafat.

The authority issued an ``urgent appeal'' to foreign diplomats to intervene against what it termed a ``full siege.''

But primary attention focused on urgent efforts by the United States to arrange peace talks between Netanyahu and Arafat. U.S. diplomats in Israel were in constant contact with both sides, and Secretary of State Warren Christopher and his top Mideast coordinator, Dennis Ross, were said to have held many telephone conversations.

The major hurdle was the composition and locale of the meeting. Diplomats said Arafat insisted that the meeting include Egyptian and possibly American and French participants, and that it be held in Cairo, Egypt, or Washington.

Arafat reportedly wanted Netanyahu to announce some immediate measure, such as reclosing the entrance to an archeological tunnel near the Temple Mount in Jerusalem whose opening by the Israelis on Tuesday sparked the rioting, or setting a concrete date for partial withdrawal from the West Bank city of Hebron.

On his way to meet with aides and U.S. diplomats, Arafat told reporters, ``I will meet him in Cairo.''

One of his aides, Nabil Abu Rdainah, added: ``Our demands are clear. We want them to close the tunnel, put the peace process back on track, and immediately implement the Oslo accords,'' meaning the Israeli-Palestinian agreements.

But at a news conference Friday, Netanyahu showed no intention of closing the tunnel or of taking any other conciliatory step, which he believed would be seen as surrender to violent pressure.