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As NATO began its 40th anniversary summit meeting last week, there was a distinct sense of an alliance in trouble. West Germany was sharply split from its British and American allies over short-range nuclear missiles. And Soviet leader Mikhail Gorbachev was entrancing Europe with his disarmament suggestions.

Yet as the NATO summit ended this week, all of those problems seem to have been eliminated. President George Bush deserves the credit he is getting from all quarters.With his proposals for dramatic troop reductions - down to 275,000 on each side, with a treaty to be signed in six to 12 months - Bush has seized the initiative and silenced critics who complained that he has been too passive while Gorbachev dominated the scene.

Under the Bush plan, the U.S. would withdraw 30,000 troops from its NATO forces - about a 10 percent cut - while the Soviets would have to withdraw 350,000 troops from Eastern Europe. A reduction in tanks to a level of 20,000 on each side would also require huge cuts in Russian armored forces.

The president's suggestion puts the Soviet leader in a position in which he must do more than make dramatic-sounding announcements; now Gorbachev must demonstrate that he means it when he talks about massive cuts in Soviet forces.

At the same time, in what must have been very tough negotiations, the West Germans agreed to an adroit plan that would tie any future reduction in short-range nuclear missiles to first making a successful deal in reducing conventional arms.

The key language is "reduction" of short-range missiles, not the "total elimination" that had been sought by West German leaders.

The West Germans put a good face on the bargain after accepting the scaled-down deal on short-range missiles and went along with others in praising the U.S. president for making the NATO summit a success.

But in the rosy glow after the NATO summit, it should not be forgotten that what happened was in essence an agreement among allies. Making the arms reduction a reality still has to be worked out with the Soviets and that won't be a quick or automatic process.

Just the deadline proposed by Bush - a year's worth of talks with a treaty implemented by 1993 - may not allow enough time for everything to take place.

For instance, the Soviets couldn't get rid of tens of thousands of tanks in that short time span. Nothing has been said about how verification of troop strengths would be carried out. Fifteen years of talks on troop reductions ended in stalemate recently because the two sides couldn't agree on how many Soviet troops are actually in the region.

Being the crafty bargainers they are, the Soviets are sure to muddy the situation by tossing in proposals for cutting aircraft numbers, the one area where NATO holds an edge.

And even if the Bush proposals are adopted, the numbers of troops, tanks and other weapons remain formidable. Europe would not become a pastoral demilitarized zone.

Yet there is cause for hope. If some reductions can be made and neither side feels threatened, perhaps more changes can be made in the future. If the number of troops and tanks dwindle, maybe the walls and barbed wire can eventually come down as well.

The NATO summit set the stage. Now the real work begins.