MOSCOW (AP) _ PLO leader Yasser Arafat said Friday that despite increased contacts with Israel, the Soviet Union will not re-establish diplomatic relations with the Jewish state unless there is an Arab-Israeli settlement.

Arafat told a news conference he had a ''warm, positive, and very important'' meeting Thursday with Soviet leader Mikhail S. Gorbachev.

The chairman of the Palestine Liberation Organization said he and Gorbachev discussed plans for an international peace conference on the Middle East, but he gave no details.

In July, the Soviet Union sent a consular delegation to Israel for the first time since breaking off diplomatic relations over the 1967 Middle East War.

Asked about the possibility of the Soviets restoring formal ties with Israel, Arafat said, ''There is a clear and obvious stand from our friends here in Moscow that there will be no return to this Israel-Soviet relationship unless there will be a comprehensive and just solution for the Palestinian just cause.''

Later, the Soviet news agency Tass distributed a statement repeating a Soviet proposal for a United Nations-sponsored Middle East peace conference that would include the Security Council's five permanent members - the Soviet Union, America, China, Britain and France.

Secretary of State George P. Shultz said after talks with Israeli leaders last month in Jerusalem that he agreed with their reservations about a conference along Soviet-described lines. He said he preferred direct negotiations between Arabs and Israelis.

Arafat said Friday he was ready to patch up relations with Syria, the Soviet Union's main Middle East ally, which has backed other Palestinian factions against Arafat.

Arafat said Arab leaders would discuss prospects for a Middle East peace conference, the Iran-Iraq war and other topics at a summit meeting scheduled to start Sunday in Amman, Jordan.