NEWS ANALYSIS : Israel Wins Politically by Staying Out of War : Diplomacy: It reaps goodwill by heeding U.S. pleas for restraint in responding to Iraq’s attacks--for now.

Despite its tough talk, the Israeli government is weighing the wisdom of a retaliatory attack on Iraq against its possible effect on goodwill in the United States--which Israel feels it must preserve in the face of the war’s uncertainties.

Observers and officials caution that controls on Israeli retaliation could unravel. If Iraq were to launch a missile or jet attack that took many lives, the public uproar might reach such a pitch that some form of revenge would be inevitable. The United States fears that an Israeli attack would strain its alliance with anti-Iraqi Arab states that are also hostile to Israel.

For now, the political benefits of staying out appear to overshadow the gains for Israel of entering the war.

The government of Prime Minister Yitzhak Shamir had feared that once the war is over, the Bush Administration would push Israel to withdraw from the occupied West Bank and Gaza Strip in order to please Egypt, Syria and Saudi Arabia--important Arab allies in the war against Iraq.

By heeding U.S. pleas to stay out, and winning praise for it, Israeli officials think they have ended a long period of deteriorating relations and picked up chips that they can cash in later.

“In the long term, Shamir hopes that appreciation of Israel’s readiness to take risks in support of wider American political goals will translate into concrete political gains,” wrote political analyst Leslie Susser. “He expects greater American understanding of Israel’s political, security and economic needs in the new postwar Middle East.”

After the war, Israel will push for peace agreements with each of the Arab allies and try to hold onto the occupied land by offering Palestinians there limited self-rule, a Foreign Ministry official said.

“We think this should be the expression of the new order in the Middle East, and we hope the United States agrees,” the official said, in reference to President Bush’s objective to install an American-led global peace.

Advised Gerald Steinberg, a defense researcher at Bar-Ilan University: “This war must not simply end with the continuation of other forms of terror against Israel.

“Some of America’s allies, such as the Syrians and Saudi Arabia, still maintain a state of war with Israel. This must end, and part of the overall peace agreement . . . must include explicit acceptance of the presence and legitimacy of Israel.”

Steinberg wrote that the Palestine Liberation Organization, because of its support for Iraqi leader Saddam Hussein, should be excluded from postwar talks. The PLO has pressed for establishment of an independent state in the West Bank and Gaza.

Renewed warmth between the Bush Administration and the Shamir government has been symbolized by the visit of Lawrence S. Eagleburger, the deputy secretary of state, as well as the dispatch of the Patriot anti-missile defense system and its American crews to protect Israel.

The joint arrivals of Eagleburger and the Patriots cooled passions that flared after the first Iraqi missiles struck last week. The Patriots, after an initial fizzle that let a deadly Iraqi Scud land on Tel Aviv, provided a night’s respite from bombing Tuesday by shooting down a Scud as it approached Haifa.

Israeli officials seized on the Eagleburger visit to present the United States with a bill not only for economic and physical war damage but also for funds to settle new Soviet immigrants over the next five years.

Israeli officials feel that the country’s role as America’s steadfast strategic ally was vindicated by the decision to stay out of the war. The sentiment is a kind of reversal; for a long time, Israelis chafed at the notion that they were being left out of the Persian Gulf drama.

“I guess we have learned that there are many ways to serve,” said a Foreign Ministry official.

Although the missile attacks so far have taken a relatively minor toll in terms of lives and damage, commentators here view the effects as more wide-reaching than the purely military. The rush of Tel Aviv residents to Jerusalem and other inland cities saps the coast’s economic strength.

In addition, the unwillingness to strike back may undermine overall confidence in Israel’s self-defense.

“Missile attacks and additional losses will certainly affect the perception of Israel’s deterrence ability and will influence for the worse the population’s state of mind,” warned Zeev Schiff, a defense columnist for the Haaretz newspaper.

Israelis insist that their own retaliation would be more effective than allied efforts to bomb missile launchers, because Israel’s effort would be focused solely on that one mission. Some military writers have suggested that only ground troops can ensure the end of the missile threat by occupying western Iraq. Openly, one writer suggested that the Americans invade by land; in private, some military officials think Israel should do it.

Yet, such steps, even if successful, risk upsetting the American war plans, which are highly beneficial to Israel. The U.S. decision to strike at Iraq’s chemical and nuclear facilities dovetails perfectly with Israel’s main goal in the crisis: to reduce the Iraqi strategic threat. In the minds of Israeli officials, liberation of occupied Kuwait is secondary.

“It must be appreciated that the (allied) effort has been concentrated on destroying the non-conventional infrastructure in Iraq and creating a situation whereby after the war, Iraq will not be in a position to threaten us,” wrote Yoel Marcus in Haaretz.

In any event, Israel may have lost its independence of action by accepting the presence of U.S. troops to operate Patriot anti-missile batteries. Israel has, in effect, become a partner in the war against Hussein’s Iraq and thus come under the sway of American policy-makers who are calling the shots in the war.

“The sight of American soldiers on Israeli territory demonstrates the fundamental change,” wrote Pinhas Inbari in the Hamishmar newspaper. “The question whether Israel will strike Saddam Hussein or not has been removed from its autonomy, and at a minimum, Israel has to coordinate every action with the United States.”

There has been no domestic political cost to Shamir over the policy of restraint. On the contrary, he is being hailed by all but the extreme right wing for his leadership in the crisis.

Ironically, Shamir’s task is made easier by his hawkish reputation, Israeli analysts say. No one can accuse him or his ruling Likud Party of being soft on Arabs.

“It would be harder, maybe impossible for a more dovish leader to show restraint,” said Aryeh Naor, a former senior Likud official in the Menachem Begin government. Naor likened the day-by-day restraint to Begin’s decision to pull out of the Sinai Peninsula as part of the Camp David peace accords with Egypt. Only a right-wing government could do it without fierce criticism.

“Now, only the most hawkish oppose Shamir, and they have no real backing on the matter,” Naor concluded.

Public opinion polls taken after the first attacks on Israel have overwhelmingly supported the policy of restraint. Proponents of a swift counterattack, notably Housing Minister Ariel Sharon, the former general and defense minister who led Israel into the 1982 invasion of Lebanon, have remained virtually silent.

“But I’m sure Sharon is taking notes,” stated Naor. “In case things go wrong, he’ll be able to point a finger at all the right places.”