The American investment in King Hussein - in peace dreams and hard weapons - is so great the State Department cannot imagine going ahead without the Jordanian as it seeks peace in the Middle East.

Despite the steps he has taken over the past week to sever ties to the West Bank, the department rests its faint hopes for negotiations on the assumption Hussein will play a role in any settlement.The king's declaration Sunday abandoning any claim to the Israeli-held territory to the Palestine Liberation Organization has not prompted a change in U.S. policy or in Secretary of State George P. Shultz's formula for peace talks.

There is no place in the U.S. plan for a PLO seat at the negotiating table, nor for a separate Palestinian delegation. The State Department still would like "responsible Palestinians" to join a delegation with Jordan and to meet with Assistant Secretary of State Richard W. Murphy during his current trip to the Middle East.

But any meetings by Shultz, Murphy or other American diplomats with the PLO remain prohibited until and unless Yasser Arafat's organization accepts Israel's right to exist and renounces terrorism.

Vernon Walters, the U.S. permanent representative to the United Nations, said Thursday there should be "some sort of a Palestinian delegation" at the peace table.

But State Department officials hastened to explain that Walters was not signaling a change from the idea of a mixed delegation promoted by Shultz. "Our positions remain as they were before," spokeswoman Phyllis Oakley said.

When Murphy reaches Jordan during his current regional tour, he will seek clarification of the king's declaration severing administrative and legal links to the West Bank, his abandonment of a special fund to assist Palestinian Arabs and Jordan's announcement Thursday that 21,000 Palestinian civil servants would be dismissed or retired.

In the meantime, though, a State Department official who keeps a close eye on the twists and turns in the Middle East said, "We don't have any indication the Jordanians are going to be breaking their ties to the West Bank. Absolutely not."

The official, who spoke on condition of anonymity, cited Jordan's control of passports and bridges in the area. West Bank farmers still are shipping their goods to Jordan and through it to other Arab countries. Members of divided families visit back and forth.

Hussein still is paying for the upkeep of religious schools and other institutions. "The economic link is still there," the official said.

Jordanian dinars are the common currency on the West Bank. Jordanian law often is applied. Many of the Palestinian Arabs hold Jordanian citizenship.

The territory was controlled by Jordan from 1948 to 1967. Ever since Israel captured the West Bank and Gaza in the 1967 Six-Day war, U.S. policy has been based on the assumption Jordan wanted to run the West Bank again.