Vatican, Israel Sign Pact to Formalize Mutual Recognition : Religion: Ceremony to recognize Jewish state resonates with reminders of anti-Semitism.

Israel and the Vatican signed an accord of mutual recognition Thursday amid hopes that it will not only broaden the reconciliation between Jews and Christians but also help bring peace to the Middle East.

In a ceremony that echoed from the centuries of anti-Semitism, from the forced conversions of Jews and from the Holocaust, the Vatican acknowledged the right of the Jewish people to a nation in their historic homeland.

“This accord of tolerance is a departure from the intolerance that causes so much hatred and so many victims,” Israeli Foreign Minister Shimon Peres said. “It is an agreement between two great religions, not just between two diplomatic entities.”

Msgr. Claudio Celli, the Vatican’s undersecretary of state for foreign relations, said the agreement will have “fundamental religious and spiritual significance for millions of people . . . throughout the world.”

Yossi Beilin, Israel’s deputy foreign minister, who signed the agreement with Celli, said: “The influence the Vatican has on the Catholic nations of the world and on almost a billion believers is tremendous. This was one of the most important steps of Israeli diplomacy in recent years.”

Peres ranked the Vatican accord in importance with the agreement with the Palestine Liberation Organization on mutual recognition and Palestinian self-government.

“A day will come when a third partner will join this agreement (between Israel and the Vatican), and I mean the Islamic world,” Peres said at a celebratory dinner.

In Washington, the president of the National Conference of Catholic Bishops called the agreement a “positive and historic moment” in Catholic-Jewish relations.

“We pray this accord will be another arch in the edifice of peace that must be built in the Middle East,” Archbishop William H. Keeler of Baltimore said as Israeli Ambassador Itamar Rabinovitch and Vatican Ambassador Agostino Cacciavillan looked on.

A White House statement said President Clinton “warmly welcomes” the establishment of official relations.

“We congratulate both parties on this historic reconciliation and urge them to proceed forward to full diplomatic relations,” the statement said, adding hope that the relationship will contribute to progress on a number of issues, “including maintaining the momentum for peace in the Middle East.”

In New York, the Synagogue Council of America and Cardinal John O’Connor, who oversees Catholic-Jewish relations for the U.S. bishops conference, called the signing an occasion for rejoicing.

And the agreement was hailed in Los Angeles--home to the second-largest Jewish population in the United States and the seat of the nation’s largest Roman Catholic archdiocese.

Mayor Richard Riordan said Catholics and Jews have long been “voices for harmony in our city.”

The agreement between Israel and the Vatican grew out of the Catholic-Jewish dialogue begun in 1965, when the Second Vatican Council repudiated the idea of collective Jewish guilt for Christ’s death 2,000 years ago. But it went significantly further with the Vatican’s full acceptance of the 20th-Century re-establishment of Israel as a Jewish state.

The Vatican had resisted formal recognition of the Jewish state since its establishment in 1948 but acknowledged its right to exist within secure borders. In recent years, it had said Israel’s occupation of the West Bank and Gaza Strip was a particular barrier to full relations.

Celli on Thursday said the Vatican hopes to play a more active role in peacemaking efforts in the region. He is to meet today with Palestinian representatives here.

The product of a year and a half of negotiations, the agreement establishes full diplomatic relations between Israel and the Vatican, provides for the exchange of ambassadors and sets out the agenda for further discussions to settle unresolved property and tax questions.

Chief Rabbi Yisrael Meir Lau, who met with Pope John Paul II in September, credited the Pope with pushing the accord through despite the unresolved questions.

“I am certain in my heart that a big part of the agreement is a result of his personal experiences in the Holocaust,” Lau said.

John Paul had known Lau’s grandfather, a rabbi in their mutual hometown of Krakow in Poland, and he recalled watching the family walk to the synagogue on Saturdays.

The Pope asked how many grandchildren the rabbi had, and Lau told him 47. He then asked how many had survived the Holocaust, and Lau told him five.

Peres said the Pope told him that he hopes to visit the Holy Land next year; it will be the first by a Roman pontiff in three decades.

But the accord has its critics.

Some Jewish historians contended that Israel should have demanded that the Vatican apologize and even pay reparations for what they charged was historical anti-Semitism, fostered by centuries of doctrine that the Jews’ suffering was God’s punishment for their refusal to accept Christianity.

Others argued that the government should have insisted that the Vatican admit complicity in the Holocaust in which 6 million Jews were killed by Nazi Germany.

During the signing ceremony at the Foreign Ministry, about 80 religious Israelis demonstrated against the agreement.

Beilin, in hailing the agreement as a “victory of sanity (and) a victory for the Jewish people and for the state of Israel,” acknowledged the past pain.

“Behind the agreement there are thousands of years of history full of hatred, of fear and of ignorance with a few islands of understanding, of cooperation and of dialogue,” he said. “Behind the agreement there are very few years of light and many more years of darkness.”

Some Christian Arabs said Vatican recognition of Israel was premature while there is still no state for the Palestinians.

“We think that it is not the appropriate time,” said Hanan Ashrawi, former spokeswoman of the Palestinian delegation to the Arab-Israeli peace talks and a prominent Christian. “Recognition of Israel should not come at the cost of ignoring the Palestinian problem.”

But the Latin patriarch of Jerusalem, Michel Sabbah, the Catholic leader in the region, said the agreement came as a result of the “general process of reconciliation in the whole area,” and he emphasized the church’s desire to contribute to peace.

Times religion writer Larry B. Stammer in Los Angeles and staff writer Paul Richter in Washington contributed to this report.