KUWAIT (AP) _ PLO leader Yasser Arafat said Monday he is ready to talk with Israeli Prime Minister Yitzhak Shamir or Foreign Minister Shimon Peres on setting up an integrated Palestinian-Israeli state.

Spokesmen for Peres and Shamir said the Israeli leaders would never meet Arafat or negotiate with the Palestine Liberation Organization. Peres, however, on Monday repeated his current theme that the time was ripe for Israel to open talks with Jordan, the PLO's one-time partner in peace efforts.

Arafat told a news conference he would meet with any Israeli leader under United Nations auspices.

The PLO chairman said he was responding to a proposal relayed to him recently in Algeria by an unidentified journalist on behalf of Ezer Weizman, an Israeli minister without portfolio.

''Weizman suggested a meeting with me to discuss the establishment of a confederation, but I put up a challenge to him to meet with me, himself or any Israeli leader, even Shamir or Peres ... to discuss setting up a dual- nationality state instead of a confederation,'' Arafat said.

He was answering a question about reports he had proposed an integrated Palestinian-Israeli state.

Arafat has long called for a secular democratic Palestinian state. He did not elaborate on his remarks Monday.

But he appeared to be saying that the Israelis would have to share power with the PLO in any integrated state, a move the Israelis repeatedly have rejected.

In Israel, Shamir spokesman Yossi Ahimeir said: ''We are ready to negotiate with Jordan, Syria, with every sovereign state, not with an organization whose aim is bloodshed and killing.''

''There is no room for any discussions with that terror organization,'' said a Foreign Ministry official who spoke on condition of anonymity.

Weizman, a member of Peres' Labor party, last week became the first senior Israeli official to say he was willing to meet with Arafat if the PLO chief recognized Israel and renounced terror.

The proposal which Arafat said came from Weizman apparently was aimed at binding the West Bank and Gaza Strip in a confederation.

U.S.-initiated Mideast peace plans have envisaged Palestinian self-rule in the West Bank and Gaza, captured by Israel in 1967, in association with Jordan.

Arab diplomatic sources, speaking on condition of anonymity, viewed Arafat's initiative as a bid to fill the void created by the distancing of the PLO from Jordan.

At last month's meeting of the Palestine National Council, the Palestinians' parliament-in-exile, Arafat scrapped a 1985 agreement with Jordan for a joint peace approach to Israel.

Abrogating the so-called Amman accord was the price Arafat had to pay to reunite the PLO by persuading hardline guerrilla leaders to end their four- year feud with him.

However, the Amman accord already was dormant. Jordan's King Hussein suspended it in February 1986 because Arafat refused to recognize U.N. Security Council Resolution 242, which calls for Israeli withdrawal from occupied territories.

The PLO rejects 242 because it stops short of acknowledging Palestinians' right to self-determination.

Arafat's remarks came amid persistent Israeli reports of secret meetings between Hussein and Peres and an agreement for an international conference that would exclude the PLO.

Peres said last week that Israel and Jordan might be able to conduct bilateral peace talks without the PLO. He stressed: ''The conditions are ripe.''

The Jordanians have denied the reports as ''groundless and untrue'' and insist they will not negotiate without the Palestinians.

On Monday, Peres repeated his belief that Jordan was ready to talk with Israel, creating ''a golden opportunity to advance the peace process in the area.''

The Israeli news agency Itim quoted Peres as saying in the Israeli city of Ashkelon that ''there is progress and changes in positions and we are not allowed to miss this opportunity.''

The PLO, along with most Arab countries and the Soviet Union, has been demanding an international Middle East conference to discuss the Arab-Israeli conflict.

Arafat said he was optimistic that a conference will be convened, stressing he expects that a preparatory committee at least to meet before the end of the year.

Reflecting his gun-and-olive-branch strategy, Arafat said: ''We consider the international conference a political battle that should be fought alongside the military battle.''