Presidents Nasser and Tito began important talks today (Friday) which could bring a Middle East peace settlement closer. The Yugoslavian President flew into Cairo yesterday (Thursday) amid reports he had worked out a peace formula compromising the Arab and Israeli positions.

Greeted at the airport by President Nasser President Tito was quoted as saying that he was coming to Cairo with a "dash of optimism" that some solution could be found to solve the Middle East crisis.

Marshall Tito has constantly pledged full support to the Arab cause, and after the Arab-Israeli conflict urged that Egyptian forces be re-equipped with arms from East European countries.

The Yugoslavian leader was accompanied by economic experts and Reuter quoted sources in Cairo as saying the U.A.R.'s material needs in the wake of the war would be a major item in the three-day talks with Egyptian leaders.

Reports of the President's plan said it would entail Israel's withdrawal from Arab land occupied during the June fighting in return for an international guarantee of its former borders.