Israeli Rivals Bicker Over Cabinet Roles : Diplomacy: Feeling upstaged, Foreign Minister Levy cancels his U.S. trip to see Bush and Baker.

Israel’s government, which had been urging its citizens to return to normal life despite the threat of missiles from Iraq, has reverted to a familiar normalcy of its own, as top Cabinet officials bicker over competing roles during the Persian Gulf War.

On Tuesday, Foreign Minister David Levy canceled a Washington trip because he felt that his visit had been preempted by Defense Minister Moshe Arens, who met Monday with President Bush and Secretary of State James A. Baker III.

No one had told Levy of these meetings, and he expected to visit Bush and Baker next Friday. Israel Radio described Levy as furious at being upstaged.

The incident dented an image of unity and competence constructed by the government during the nearly month-old Persian Gulf War. “It’s a pity, of course,” sighed Avi Pazner, a spokesman for Prime Minister Yitzhak Shamir.

Officials have played down other reported instances of disagreement, especially over the policy of restraint concerning Iraqi missile strikes.

But in the wake of Levy’s complaint, officials in both the prime minister’s office and the Foreign Ministry admitted that Cabinet rivalries are bubbling to the surface at prewar strength.

Largely at issue, even in this time of uncertainty, officials say, is the race to succeed the aging Shamir. Candidates such as Arens and Levy view the crisis as a chance to show leadership talent before elections, expected within the next two years. Others in less prominent positions, such as hawkish Housing Minister Ariel Sharon, are lying in wait--in case would-be successors make a misstep.

Shamir’s decision to send Arens to Washington was viewed as tipping the defense minister as his choice as heir. Shamir met Levy hours before Arens was set to meet Bush and told the foreign minister nothing about it, newspapers and Foreign Ministry officials said. Levy thought Arens was meeting only with U.S. Defense Secretary Dick Cheney.

During his trip, Arens pressed the United States to let Israel respond to Iraqi rocket attacks. “The Americans are aware of the need to eliminate the missile threat,” Arens said.

There was no sign that Bush was ready to approve Israeli retaliation and Washington evidently expects Shamir’s policy of restraint to hold. “I don’t think we anticipate any change of policy,” White House spokesman Marlin Fitzwater said.

State Department spokeswoman Margaret Tutwiler said Arens had appealed for more U.S. economic aid to compensate Israel for the cost of keeping its troops on alert in the face of Iraqi Scud missile attacks. In an hour meeting with Baker, Arens outlined “in some detail the additional cost to the Israeli military of keeping their forces on a high state of alert,” Tutwiler said.

She said Baker did not promise to add to the $3 billion a year in U.S. military and economic aid to Israel, by far the largest program for any country. Instead, Baker told Arens that he would seek aid for Israel from the European Community and other friendly countries.

Tutwiler said Washington expects the Israeli government to formally request more money to house Soviet Jewish immigrants, as well as to defray the cost of the military alert. Israeli officials have said the Jerusalem government needs $13.5 billion over the next decade for housing assistance alone.

During his own visit to Washington, Levy had planned to discuss postwar diplomatic moves to resolve the Israeli-Palestinian conflict along with formulas for forging peace between Israel and hostile Arab states. Levy has publicly advised that Israel should make peace initiatives now, while it enjoys wide sympathy for withstanding rocket attacks.

His position put him in conflict with far-right members of Shamir’s government and perhaps Shamir himself, Foreign Ministry officials say. Newspapers said the rightists feared Levy would make concessions to Baker, who has said that Israel should give up occupied land in the West Bank and Gaza Strip in return for peace.

“It is clear that the prime minister is cornering Levy. Sending Arens first is saying that Levy is, in fact, not to be taken seriously as foreign minister,” said a senior Foreign Ministry official.

Levy has clashed with his own deputy, Benjamin Netanyahu, whom he views as Shamir’s representative in the Foreign Ministry. The two are not on speaking terms, and Levy has tried to curb Netanyahu’s appearances on U.S. television. During the war, Netanyahu has overshadowed Levy on the airwaves. Levy speaks no English.

Sharon, a former defense minister, has been kept out of sensitive discussions on Israel’s war policy regarding Iraq, government officials say. Sharon favors quick retaliation against missile attacks and he is laying the groundwork to lash out at Shamir, Arens and other rivals should Israeli casualties mount, the officials assert.

“He is taking notes of everyone’s position to use as ammunition later,” said an insider with access to Cabinet meetings.

Shamir has still found time to play politics. He named a profoundly anti-Arab Parliament member to his Cabinet over the objections of prominent members of his own Likud Party. Aides say Shamir wanted to shore up his hold on power in case of defections by erratic Cabinet ministers or small parties that give Shamir’s coalition its ruling majority.

Defections are not expected now, observers say, because anyone who created a Cabinet crisis would be stained with the charge of fomenting chaos in a time of war.

Times staff writer Norman Kempster in Washington contributed to this report.