Agreement by Saudi Arabia, the wealthiest of the Arab nations, to join Mideast peace talks may be the spark the United States needs to jump-start Arab-Israeli negotiations.

The participation of Saudi Arabia and its five Persian Gulf neighbors, announced Saturday by Secretary of State James Baker, could provide a carrot for Israel to join negotiations and be a moderating influence on the Jewish state's most implacable enemy, Syria.Although the path toward such peace talks is still fraught with hurdles, Baker made no secret of his elation at the deal he had worked out in intense, secret deliberations with Saudi Arabia and its allies.

"We will break at least one major taboo in the sense that we will have Arab states sitting down and negotiating with Israel," Baker told reporters aboard his plane at the start of his fourth shuttle to the Mideast this year.

The Saudis are in a unique position among Israel's enemies.

They have clout and credibility in the Arab world, bankrolling Israel's staunchest enemies - Syria and the Palestine Liberation Organization - and being the guardians of Islam's holiest sites, Mecca and Medina.

Yet they don't have a border with Israel, which makes them a step removed from the anger and enmity of Israel's relations with its immediate neighbors.

Saudi Arabia is also closely allied with Israel's greatest protector - the United States, a fact Israelis regard as significant in efforts to breach the wall of hostility around them.

The agreement calls for the head of the Saudi-led Gulf Cooperation Council to sit in as an observer at direct talks among Israel and its immediate neighbors, Syria and Jordan, and the Palestinians.

In a second phase of Israeli-Arab talks, the council would deal directly with Israel on such issues as the Mideast's scarce water resources and arms control.

The agreement, which reverses Saudi Arabia's total refusal to join the Middle East peace conference Baker is trying to arrange, may explain why Baker decided to embark on his new mission to the region after returning downhearted from his last trip.

The reversal was reportedly negotiated by Saudi Arabia's energetic U.S. ambassador, Prince Bandar bin Sultan, bucking conservatives in his monarchy who wanted to maintain the country's 43-year refusal to negotiate with the Jewish state.

The United States had hoped the Saudis would be emboldened to deal fully with Israel after both countries found themselves the target of Saddam Hussein's aggression in the recent gulf war.

But the decision by the Saudi-led Gulf Cooperation Council, grudging though it was, could still be a boon for the main players Baker is trying to nudge toward the negotiating table.

"We think this is an important decision," he said.

The only country to have negotiated directly with Israel, albeit it with step-by-step U.S. guidance, was Egypt. The talks resulted in a 1979 peace agreement, but Egypt was shunned for a decade by its Arab neighbors, and the peace with Israel has been a cold one.