Souls Lost in the New World : THE PURSUIT OF HAPPINESS, <i> By Anne Roiphe (Summit: $22.95; 473 pp.)</i>

In 1978, the New York Times published a story entitled “Christmas Comes to a Jewish Home,” describing the “sacred event” of Christmas in a nominally Jewish household, complete with trimmed tree and readings from Dylan Thomas. Shocked readers denounced the article’s “tooth-fairy theology.” Anne Roiphe, its author, was taken aback.

In response to such vehement reactions, Roiphe began to explore her own spirituality, and the tensions between maintaining a Jewish identity and assimilating into the American way of life. Her inquiry produced the novel, “Lovingkindness,” as well as the autobiographical essays of “Generation Without Memory.” Now this ambitious new novel provides elaborate proof of a disturbingly simple equation: To do well in American terms is to renounce what it means to be Jewish.

The central character of “The Pursuit of Happiness” is Hedy Gruenbaum. Brought up in New York’s gilded ghetto and summering in Maine, Hedy clearly mirrors much of Roiphe’s own privileged childhood. But unlike Roiphe, who has not strayed from the East Coast, her protagonist uproots herself and leaves for Israel. Hedy learns Hebrew, studies at the Technion, marries and rears a family. But she never entirely loses her liberal American values, nor does she return to the traditional Judaism that preceding generations of Gruenbaums had largely rejected. Hedy does not believe in God.

The novel spans five generations of the extended Gruenbaum family--and the few, interminable hours that Hedy spends waiting to learn the outcome of her daughter’s emergency brain surgery. Like family legend, handed down from parent to child, the Gruenbaum story emerges in brief vignettes, dictated less by chronology than the promptings of memory. It’s a somber chronicle of immigration, assimilation and eventual disillusionment.

Hedy’s family came to New York from Poland in 1880, driven by her great-grandmother’s single-minded pursuit of an elusive American dream. Roiphe describes the Dickensian urban poverty of their first encounter with America: living with a lodger in one cramped room where the animal grunting from adults’ beds keeps the children awake; the immigrants, Moses and Naomi, working long hours in squalid conditions; rival gangs of dirty children fighting in the streets; smallpox rampant.

But it’s all worthwhile if there’s better to come, and Moses’ pragmatic son, Isaac, determines to make a reality of his mother’s dream. Heedless of the words of the rabbis in the cheders , he sells suits from daybreak until nightfall from his cart on a street corner on the Lower East Side, gradually building the garment-industry fortune that will maintain his family for generations to come.

Money makes the Gruenbaums’ world fairly spin--but, predictably, it doesn’t assure them happiness, or even a really secure rung on the social ladder. It simply buys them a certain respectability, some influence and an awful lot of things that match. And we begin to wonder, as hen-pecked old Moses often did, whether the Gruenbaums are altogether better off in America.

When Isaac dies of a well-earned heart attack in 1922, his children are free to spend his fortune. Their mindless materialism becomes the target of Roiphe’s most scathing criticisms: “ ‘How simple it was to have a good time,’ thought Mildred, stacking the crystal candy dishes up on the dining-room table next to the silver candlesticks and the soup tureens and the Spode plates and the silver knives and forks with the willow tree pattern. . . . ‘It’s all mine for getting married.’ ”

Yet Roiphe tempers her satire with poignant, affecting descriptions of these poor, lost souls. We glimpse Hedy’s mother, Flora, at a birthday party, immobilized in her elaborate costume of a doll in a box, with a shameful trickle running down her legs, soaking through the cardboard outfit and filling her shoes. And, a generation later, Hedy is embarrassed by her mother’s fur coat, red fingernails and Cuban heels, and is suddenly conscious of the turquoise-and-gold interior the decorator chose for their apartment. Her school friends’ mothers ride bicycles and horses, wear sensible shoes and tweeds, volunteer for Planned Parenthood and have “very good values.”

“If you knew how to ride, Hedy realized, you decorated your house so that a horse would feel comfortable in it. Hedy understood that you needed to have . . . a lot of money for a very long time to have good values,” and wonders whether those good values are connected with the words of the Lord’s Prayer or Christmas carols.

The sincerity of these descriptions is intermittently undermined by a sanctimonious narrator whose interruptions punctuate the family history. An oh-so-forgiving voice repeatedly exhorts her “dear reader” to see the Gruenbaum deeds in context: “My characters have spirits that would soar to the heavens, but they live in the world of exchange and commodity,” the narrator hurries to explain.

More than 400 pages later, by the time the narrator sums up the Gruenbaum predicament--”The struggle to survive in another culture was the sublime work of my characters’ lives”--we, the “dear readers,” are heartily tired of the labored explanations of this irritating pedant. We’d already got the point. Every time.

Roiphe concludes her novel when a fifth generation of Gruenbaum cousins cross paths in a series of highly unlikely coincidences. The novel’s ending and narrator are curious flaws in an otherwise polished, compelling and far-reaching story, which ultimately poses the troubling question whether the pursuit of happiness is anything more than a way to pass the time.

For neither assimilation nor the reaffirmation of traditional Judaism can guarantee the Gruenbaums the uncomplicated happy endings they want.