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EUROPE COUNCIL PROPOSED FOR GERMANY

Soviet President Mikhail S. Gorbachev, moving to break a summit stalemate over Germany's future, has proposed that the military role of a united Germany be decided by a new "council of all Europe" with direct U.S. and Soviet participation, U.S. sources said Friday.

Gorbachev made the proposal to President Bush at their opening session on Thursday, the sources said, and the two leaders assigned their top diplomatic aides to pursue the concept next week in Copenhagen, Denmark, and again in Berlin two weeks later."We are prepared to work with it. It is not something we would reject out of hand," said one U.S. official familiar with the terms of the Soviet proposal.

As he began his second day of talks with Bush, the Soviet leader was asked if assigning the German issue to a European council would allay his concerns about a revival of German militarism.

"The president and I are discussing precisely these matters, and I must say that this is a very substantive discussion," Gorbachev replied.

Gorbachev's plan calls for annual meetings of the leaders of the 35 Western, neutral and Eastern states that make up the Conference on Security and Cooperation in Europe. There would be more frequent meetings of their foreign ministers, a permanent secretariat or administrative staff and creation of military and civilian "conflict management" centers.

Bush and Gorbachev, in effect, agreed to disagree for the duration of their four-day summit on the military face of a united Germany, and are directing high-ranking aides to "meld" their concerns.

Soviet Foreign Minister Eduard A. Shevardnadze earlier had suggested placing a united Germany in both NATO and the Warsaw Pact, but the U.S. reaction was cool.

Now Secretary of State James A. Baker III and Shevardnadze will explore the proposal for a new European council when they attend a human rights conference in Copenhagen next Tuesday and then at a meeting in Berlin tentativety set for June 22.