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PLO: U.S. MAY HALT TALKS WITH PALESTINIAN GROUP BECAUSE OF ATTACK ON ISRAEL.

The Bush administration has decided to break off its dialogue with the Palestine Liberation Organization because of an attempted attack on an Israeli beach, the Washington Times reported Friday.

The Times, quoting administration sources, said Secretary of State James Baker had not yet decided when and how to announce the action, which it said probably would allow for a resumption of the talks some time in the future.The newspaper said the decision was taken because PLO leader Yasser Arafat refused to condemn the attack, carried out by the Palestine Liberation Front, one of the PLO's constituent groups.

Baker, in Turnberry, Scotland, for a NATO meeting, said Friday that terrorism is not the sole issue in deciding whether the United States will suspend its 16-month dialogue with the PLO.

He said talks were continuing while the administration sought to find out "all we need to know" about the circumstances. He declined to say what information was still lacking."

The dialogue with the PLO, carried out by Robert Pelletreau, the U.S. ambassador in Tunisia, where the organization has its headquarters, was begun after Arafat renounced terrorism and recognized Israel's right to exist in December 1988.

The United States said it would end all contact at any time if the PLO failed to live up to its renunciation of terrorism.

The May 30 assault was thwarted by Israeli forces, who said they have proof guerrillas aimed to murder civilians.