Soviet Foreign Minister Eduard Shevardnadze, challenging U.S. dominance of Middle East diplomacy, holds separate talks with Israel's Moshe Arens and Palestinian leader Yasser Arafat in Cairo Wednesday.

Shevardnadze will be pushing the Kremlin's Middle East peace drive into high gear when he tries to overcome Israel's resistance to an international conference.In the runup to his meeting with the Israeli foreign minister, he declared that a settlement to the 40-year-old Arab-Israeli conflict was no mirage and it was vital to the Soviet Union because the Middle East was Moscow's backyard.

In Washington, President Bush said he was not worried about Shevardnadze seizing the initiative in a field in which Washington has taken the lead for years.

"I don't want to send somebody just charging off on a mission to counter Mr. Shevardnadze's trip," he told a news conference.

"Let's do something that's going to have results...I don't want to be stampeded by the fact that the Soviet Foreign Minister makes a trip to the Middle East," Bush said.

Shevardnadze was due to meet Arens at the Soviet embassy residence in the morning and Arafat, chairman of the Palestine Liberation Organization (PLO), in the evening.

Conflicting timetables appeared to rule out any attempt to broker talks between Arens and Arafat. Arens was scheduled to leave Cairo before the PLO chief met Shevardnadze.

The Soviet minister's five-nation tour has given Moscow - at least temporarily - a prominent Middle East role that has been played by Washington since it brought Egypt and Israel together in a peace pact a decade ago.

Although Washington started direct talks with the PLO last December after it recognized Israel, U.S. efforts to spark broader Arab-Israeli contacts fizzled out in the dying months of the Reagan administration.

Arens, the first minister in Israel's new government to visit Egypt, held talks with Egyptian Foreign Minister Esmat Abdel-Maguid Tuesday night and said both were committed to efforts for peace.

"Peace-making in the Middle East is a very difficult exercise and a painfully slow process," he told reporters. "But we are both convinced that a very intensive effort has to be made to try to move the process forward."

Shevardnadze's meeting with Arens will be their first formal contact, though they met at a conference in Paris last month. The Israelis say they hope it will bring Moscow closer to restoring relations cut in the 1967 Middle East war.

Shevardnadze has won support from Syria, Jordan and Egypt for an international conference organized by the United Nations to solve the Arab-Israeli conflict.

Israel has rejected this formula and wants direct talks with the Arabs sponsored by the United States and the Soviet Union.

Prime Minister Yitzhak Shamir kept up Israel's barrage against Arafat in Paris on Tuesday, branding the PLO "a very big obstacle to peace."