Their New Internal Security Director Divides Israelis : Government: Controversy reflects era of change. He aims to protect peace process from Jewish extremists.

K was angry. Evidence was emerging of a conspiracy by right-wing Jewish settlers to murder Palestinians in what appeared to be an effort to upset Israel’s peacemaking efforts.

“I’m going to bring them in, and I am going to see them in jail,” K, then acting chief of Shin Bet, Israel’s tough security police, told a family friend. “To me, they are criminals--and enemies of Israel and the Jewish people.”

Half a dozen settlers, among them two rabbis and a young army officer, were arrested last autumn. The officer was convicted of taking military explosives without authorization, a carpenter was convicted of making silencers, and several cases are still pending.

The affair, which aroused fears of a new “Jewish underground” attacking Arabs, raised for Shin Bet the awkward question: “Who is the enemy?”

Amid Israel’s efforts to achieve peace with its Arab neighbors, particularly the Palestinians, Shin Bet’s old target--Arabs seeking to destroy the Jewish state--was no longer complete.

The Palestine Liberation Organization, whose leaders were once hunted by Shin Bet, had become a political ally. Islamic fundamentalists, who had received quiet encouragement from Israeli intelligence, were viewed now as the No. 1 menace. And renewed violence by Jewish extremists was a real threat.

“The focus for all of the security services obviously must shift with events,” a retired officer from Mossad, Israel’s external intelligence agency, said. “For the General Security Service (Shin Bet’s formal name), this means working with the PLO in many cases, focusing much more on Islamic fundamentalists and, yes, guarding against, God forbid, Jewish terrorism.”

Yet K’s appointment last month as Shin Bet’s new chief is stirring much controversy here precisely because of his determination to refocus the organization’s efforts, as well as because of his role in pursuing Jewish extremists on both the left and the right during the 1980s. Under Israel censorship regulations, K may be identified only by the initial of his first name.

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Working with Mossad and military intelligence, Shin Bet operates under the prime minister and is primarily responsible for internal security in Israel and the occupied Palestinian territories. It also investigates the background of candidates for sensitive government posts and oversees physical security for key officials and installations.

“Among the triumvirate of the chiefs of Mossad, military intelligence and Shin Bet, it is the Shin Bet guy who has the day-to-day burden of protecting the peace process,” a senior Western diplomat said in Tel Aviv. “The job is key, absolutely key, and the controversy over (K) must undermine public confidence.”

Six senior Shin Bet officials have resigned or retired in connection with K’s appointment. Some were disappointed that they did not get the coveted post, but others complained that K lacked sufficient experience in dealing with Palestinians and that he might prove soft on Arab terrorism.

To many Israeli security specialists, K was more an analyst and lately a manager than an operations specialist; he lacked the long experience in recruiting agents, interrogating suspects and pursuing terrorists that other candidates had.

His principal rival was Gidon Ezra, 58, who was identified only as G while he was Shin Bet’s deputy chief. Big and gruff, Arabic-speaking, chain-smoking, with little patience for political subtleties, Ezra spent his career chasing Palestinian guerrillas and saw himself as Shin Bet’s top field officer--and virtually the opposite of K. When he did not get the post, Ezra quit, and he now advises the police on countering terrorism.

“In a centralized agency like Shin Bet, the chief decides everything,” a senior government official explained, asking as others did that he not be quoted by name. “People find it hard to adjust to new leaders. This is particularly true with the changes on the ground, with new orders from the political level and a much different reality emerging day by day.

“Look, most of the old guys were experts on the PLO, but the PLO is now a partner of sorts. A fresh mind was necessary. And Shin Bet needs reorganization, certainly at the very top, to deal with new threats like the suicide bombers.”

But Jewish settlers from the occupied West Bank took K’s appointment as an intensification of a “campaign” against them. Leaders of the outlawed anti-Arab Kach movement tried to block the appointment in Israel’s Supreme Court.

“This was a signal to the Arab terror organizations that the main emphasis of the security service will not be to watch them but to watch the Jews, the settlers,” said Noam Arnon, a spokesman for Jewish settlers in Hebron, in the West Bank.

In his 1990 thesis for a master’s degree in political science, K branded extremist groups such as Kach racist for their anti-Arab philosophy, a threat to Israeli democracy and potentially even able to provoke a civil war.

“These ideological criminals must be severely dealt with by the authorities because their crimes derive from a world outlook that denies the validity of Israel’s system of government,” he wrote.

He accused the then-rightist government of failing to defend itself against the threat and thus encouraging the extremists.

To embarrass K and mock the secrecy that surrounds Shin Bet, ultra-rightists included his full name, address and phone number, plus details of his career, in recent leaflets. They painted his name in graffiti outside the military censor’s office, and they even included a computer message on the worldwide Internet sarcastically inviting congratulations on his appointment.

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Still, Prime Minister Yitzhak Rabin, who appointed K and is his only boss, has stood by him as the person needed to bring Shin Bet into a new era.

Ori Orr, a retired general who chairs Parliament’s foreign affairs and defense committee, says of K, “I think he is the right man for the job.” Benjamin Netanyahu, chairman of the opposition Likud Party and a boyhood friend of K, talks of his ability to modernize the security service and ensure its effectiveness.

A lavish profile in the newspaper Maariv described K as “reliable, serious, solid and with an acute analytic mind.” Quoting Shin Bet officers, Maariv reporter Ronit Vardi said K “is very well liked and respected, considered an intellectual leader with a quiet capacity to assert himself, a boss who commands neither through instilling fear nor by imposing himself.”

Isser Harel, who founded Shin Bet in 1948 and headed it until 1954, also defended K as “a very good nomination.” Times are changing, Harel said, and Shin Bet must “play a more important part in the peace process.”

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Changes are already coming, according to government officials. K is reorganizing Shin Bet’s top ranks and restaffing them with younger officials. He is emphasizing the gathering of intelligence in the Gaza Strip and the West Bank, recruiting more Palestinians as agents and focusing on Islamic fundamentalists. And he is continuing to watch Jewish extremists closely.

K has told associates in Israel’s security community of his hope of cutting back Shin Bet, shedding many of its police duties and making it a leaner organization as Israel ends its occupation of the West Bank.

K has other challenges too. Legislation is being drafted to define Shin Bet’s authority, duties and operational methods. The chief will continue to report to the prime minister, but there will be more civilian review of the service’s activities, including an ombudsman to hear complaints.

The draft law will preclude political parties from making use of Shin Bet. It will guard against the possibility of an extremist government employing the agency to create a police state, and, in a secret appendix, it will spell out what agents may and may not do in the line of duty.

Israeli regulations now permit Shin Bet officers to use “moderate physical pressure” to extract information during interrogations--and to go further in emergency cases when a terrorist attack is expected.

Rabin, assessing the new orientation required in Shin Bet, initially favored an outsider to succeed Yaacov Perry, who had been chief through seven tumultuous years. Perry may be identified now that he is retired.

Supported by Perry, K won Rabin’s acceptance, according to government officials, by combatting the upsurge in terrorist attacks by militant Islamists opposed to the self-government agreement and by streamlining Shin Bet so it can react faster to crises.

When Cpl. Nachshon Waxman was abducted last autumn by militia members of the Islamic Resistance Movement, known as Hamas, Shin Bet, under K’s direction as acting chief, located the suburban Jerusalem house where he was being held and made possible the army’s rescue attempt, during which the kidnapers killed the soldier.

K is also credited with having thwarted a number of Hamas attacks in recent months through strengthening intelligence work and in spite of the difficulty of penetrating Islamic groups.

“K has an understanding of the new terrorist threats and how they differ from those in the past,” a Shin Bet officer said. “We have a different enemy today, and we need to adjust, to change our direction.”