Soviet Premier Valentin Pavlov flew to London for what officials in Jerusalem said would be a "very important" meeting with Israeli Prime Minister Yitzhak Shamir, setting off reports of a possible restoration of diplomatic relations between the two countries.

Shamir told Secretary of State James Baker last week that Israel would participate in a regional peace conference on the Middle East under the auspices of the United States and the Soviet Union. But Shamir stipulated that Moscow, to co-host the conference, had to renew ties with the Jewish state, broken 24 years ago.Both Pavlov and Shamir were to attend the unveiling of the European Bank for Reconstruction and Development, a lending institution set up to help rebuild the economies of Eastern European nations now free of the restraints of socialism. Moscow hopes to get assistance from the bank for projects in the Soviet Union.

A Soviet Embassy spokesman confirmed Pavlov's arrival in the British capital Sunday and said a meeting with Shamir was tentatively scheduled for Tuesday.

Shamir's spokeswoman, Linda Shimon, said in Jerusalem that Shamir was preparing to meeting with Pavlov. "It's the first time ever that a prime minister of Israel will meet with a prime minister of Russia," she said.

Shamir also will hold talks with British Prime Minister John Major, Czechoslovakia's President Vaclav Havel, Romanian President Ion Iliescu and top officials from Luxembourg and the Netherlands.