BY CHARLES W. BELL | The photo was printed on front pages around the world in October, showing President Clinton, Yasser Arafat, Benjamin Netanyahu and King Hussein assembled at a Maryland conference center after the Israelis and Palestinians signed yet another deal brokered by the White House.

In the photo, Hussein is wearing a necktie depicting children holding hands, standing on olive branches.

“Ah, the tie,” says John Wallach. “There’s a story there.”

The children—one Israeli, one Arab, one American—and the olive branches form the symbol of a children’s peace organization Wallach formed six years ago.

The organization is called Seeds of Peace, and Wallach, a one-time globe-trotting correspondent for the Hearst newspaper chain, runs it from an office in midtown.

Its main project is a summer camp in Maine, where youngsters 13, 14 and 15 spend four-week sessions getting to know one another and, maybe, becoming friends.

Wallach expects between 300 and 400 kids to attend sessions this summer.

“There are no other programs like it,” he says. “We don’t receive money from any government, and all the kids are chosen by the governments involved” (at the moment Israel, Morocco, Palestine, Tunisia, Jordan, Egypt and Qatar).

The annual budget, about $1 million, is covered by foundation grants and private donations. Wallach, 56, who splits his time between Manhattan and Washington, Conn., launched Seeds two years before he retired as foreign editor of Hearst.

Among his scoops was breaking the Iran-Contra story, and lining his office walls are autographed photos by everybody from Anwar Sadat and Richard Nixon to Pope John Paul and former Soviet boss Mikhail Gorbachev.

But the summer camp is his baby now.

“My parents experienced the Holocaust,” he says, “and when I was 6 or so, I began thinking about all the children who didn’t survive. About a million of them. And I wanted children to grow up friends instead of enemies.”

Wallach, who grew up in Riverdale, the Bronx, and Kew Gardens, Queens, was still covering the White House and world diplomatic beat when Seeds of Peace welcomed its first 45 summer campers in 1993.

“Now,” says Wallach, “I spend my summers at camp.”

There, the youngsters play together, spend two hours a day talking about their perceptions and feelings, attend one another’s worship services (if they want), run their own radio station and wind it up with a trip to Washington for meetings with Clinton and Vice President Gore.

The necktie was Wallach’s idea. “I grew up around ties,” he says.

His parents arrived penniless from Germany in 1941 after bribing their way out of a death camp, and his father, Paul, borrowed $5,000 to found Raxon Fabrics. It grew into a major supplier of materials to tiemakers.

(Ties were a long-time family business in Cologne, Germany, and one uncle in London still makes them at age 91).

One of Paul Wallach’s biggest customers was the father of Ted Lazarus, a major tie manufacturer today, and it was to Ted Lazarus whom John Wallach turned to when he wanted Seeds of Peace ties.

“Not only was it Ted’s design,” says Wallach, “he gave us 1,000 ties.”

In turn, Wallach has given the tie to world leaders, including Clinton, who returned his, citing a law against accepting gifts worth more than $25.

Wallach is a well-known name in journalism, and he was United Nations correspondent for the now-defunct Radio Press International when Hearst hired him in 1968 and sent him to Washington. He has seen most of the world and won more than his share of awards and honors.

“I’ve seen my byline, I’ve been on TV, I’ve written books,” he says, “but for thrills, there is nothing like seeing smiles and hugs by kids who could’ve grown up hating each other.”