Jewish and Palestinian peace activists, defying laws forbidding contact with terrorist groups, announced plans for a New York conference aimed at stimulating dialogue between Israel and the PLO.

The unprecendented conference - the first organized jointly by Israelis and Palestinians - exposed the organizers to possible arrest and incarceration for inviting Palestine Liberation Organization representatives to attend the meeting along with members of the Israeli Knesset.Plans for the March conference were unveiled Wednesday as members of the Knesset, Israel's parliament, announced plans to attend an international conference in Paris next week in which PLO members also will participate.

Mordechai Baron, one of the Israelis organizing the New York conference, said the 1986 law banning contacts with PLO members is "utterly stupid and self-destructive."

Israeli citizens can be imprisoned for three years upon conviction on charges of meeting with representatives of the PLO and other groups considered "terrorist organizations" by the government. Four Israelis have been convicted under the 1986 law.

The conference coordinators, editors of the left-wing Israeli magazine New Outlook and the Palestinian newspaper Al Fajr, said the New York meeting would reveal the absurdity of the Israeli law but will not violate the prohibition against contact between Israelis and PLO members. They did not explain how the ban would be circumvented.

Those invited to attend the New York meeting included Knesset members, prominent Palestinians from the Israeli-occupied territories and members of the Palestine National Council, the legislative arm of the PLO.

"This year is going to be the year of the dialogue," said Moshe Amirav, who broke with the right-wing Likud Party last year because of its refusal to talk with the PLO. "We will meet with the Palestinians everywhere - in Jerusalem, in New York."

Right-wing members of the Knesset are trying to prevent four of their colleagues from leaving Israel to attend the Paris conference on possible contributions from European nations to the Middle East peace process.

"There is nothing to my mind more important than to look in the eyes of your enemy and to talk about peace," Arye Eliav, a Labor Party member planning to attend the Paris conference, said in an interview on official Israel Radio.

Eliav called the 1986 Israeli law "foolish and idiotic."

Palestinians in the occupied territories have staged an uprising for more than a year.

Many Israelis and Arabs say the uprising has contributed to several important recent developments, including the PLO declaration in November of an independent Palestinian state and the United States' decision last month to open a "substantive dialogue" with the organization headed by Yasser Arafat.

Amirav said more Israelis are beginning to understand that "we have to move forward, that something has to be done" and that the government can no longer avoid contact with the PLO.

In the occupied territories Wednesday, soldiers shot and killed a 16-year-old Palestinian and wounded at least five others during clashes, Palestinian sources said.