Prospect of Returning Golan Heights Brings Bitter Debate in Israel : Negotiations: Some fear threat from Syria, even with accord. Residents want peace but don’t want lives they have built upended.

From the cliff-top observation deck where he sells knickknacks to passing tourists, Joel Sheinfeld squinted into the hot, hazy future, taking in the harp-shaped Sea of Galilee and northern Israel.

“You don’t have to be a general in anybody’s army to figure this one out,” said Sheinfeld, entrepreneur and resident of a kibbutz here. “Just look at the view. That’s 30% of our country’s water supply and a good chunk of our country. It’s no wonder the Syrians used to shell us from here every day.”

It is, in fact, that splendid view that makes the Golan Heights so strategically important--and that is foremost in the minds of the military chiefs of staff of Israel and Syria in the historic round of security talks they concluded in Washington last week.

That sensitive three-day meeting, which reported modest progress, was designed to set the stage for the first real peace negotiations between these two longtime enemies, a process that most believe will eventually result in an Israeli pullout from Sheinfeld’s cliff-top Peace Vista and the rest of the Golan Heights. Syria, in fact, has demanded a hand-over of the Golan as a condition for formal peace talks.

The Golan, which rises from the northern and eastern edge of the Sea of Galilee, is 10 miles wide by 40 miles long--about as big as Los Angeles--and home to 16,000 Israelis in 33 settlements. Although it has no special religious significance for Israel, it has for 28 years been the buffer zone between Israel and Syria, creating a “cold peace” in recent years.

In the military argot, the Golan has provided Israel “strategic depth,” keeping northern Israel out of range of Syrian artillery.

There is little doubt these days that Israeli Prime Minister Yitzhak Rabin is prepared to give the Golan Heights back to Syria in exchange for a solid peace accord with President Hafez Assad, who came to power four years after Syria lost the Golan.

Israeli leaders see such an agreement as vital to the success of the entire Middle East peace process; Rabin has said anyone who claims Israel can have peace with Syria and keep the Golan “is uttering the biggest of all lies.”

The generals last week discussed security arrangements that would be required to reassure both countries. They agreed on the need, in any future accord, for a demilitarized zone and an early warning system around the Golan Heights, which Israel believes would be necessary to protect it from Syrian aggression.

Israel also hopes that an accord would force Syria to use its influence to end guerrilla activity against Israel by the pro-Iranian organization Hezbollah in southern Lebanon.

In the past few weeks, for example, attacks and counterattacks by Israel and Hezbollah have killed at least half a dozen soldiers and civilians, including a French cook for a Club Med resort in northern Israel.

The Golan was seized by Israel in the 1967 war, and thousands of Syrians were driven from their villages here. It was held against Syrian attack in 1973 and annexed in 1981. Past Israeli governments, including those from Rabin’s Labor Party, encouraged Jewish settlement of the region as a means of guaranteeing Israel’s security and pledged never to relinquish it.

Now, talk of giving up the Golan has touched off a bitter debate in Israel, where polls show public opinion about evenly divided between those who favor giving up the Golan and those who oppose a hand-over.

Israelis who live in the territory, naturally, are strongly opposed to the move, which would disrupt their lives and, most probably, force them to relocate. As a group, the Golan residents are mostly political liberals who support peace talks and who gave strong backing to Rabin in the last election. And they represent an important voting bloc for the prime minister, who faces a tough election battle next year.

Right-wing Israelis see the move as a threat to the country’s security, putting much of the country within easy range of Syrian guns. Moreover, those critics say, it represents an unnecessary capitulation to a Syrian dictator who cannot be trusted.

Certainly, the volcanic plateau is today an integral part of Israel and the life of Israelis. Hundreds of thousands of Israelis come to the Golan to hike and camp in national parks, ski at the country’s lone downhill resort, frolic in the waterfalls and take in the view that, on a clear day, can include the Mediterranean coast.

Small industries, especially on the many kibbutzim, have flourished. The hilltop Mevo Hama kibbutz has an electronics and plastics factory, for example. And wine and mineral water from the area are on store shelves across the country.

Perhaps the prime example of that development is the resort at Hammat Gadar, where 300,000 visitors a year come to see the alligator farm, the pools fed by natural hot springs (ranging from 79 degrees to 126 degrees) and the remarkably intact ruins of a 2,000-year-old Roman bath complex.

Hammat Gadar is on a finger of land that borders both Syria and Jordan, and Israeli troops watch their counterparts, easily visible across the Jordan River, from a bunker on the resort grounds.

As elsewhere on the Golan, the operators haven’t let the talk of relinquishing the region undermine their expansion plans. The four local kibbutzim that own the resort are building a new Thai restaurant, and a hotel is on the drawing board.

But the prospect of relinquishing the Golan has certainly created tension in the region, which has banded together in a public relations campaign to fight it. “The People With the Golan,” reads one popular bumper sticker. “Not Moving From the Golan,” says another. “Rabin--Hold It a Second,” says a third.

“We are not religious fanatics, but we feel we have built something here,” said Frank Donnell, a 50-year-old social worker and father of four who has lived on the Golan for 24 years. “To be told it’s going to be taken away has, shall we say, an overpowering effect on one’s rationality.

“Especially,” he added, “when there’s no guarantee that giving this place up will make peace. We already have a peace. Why fool with it?”

How great a security risk would be posed by giving up the Golan to Syria? No one knows for sure, but much depends on who inhabits the area. Will Israelis be allowed to stay in guarded settlements? Will Syrians re-establish villages? And will an international force, as some Israelis hope, come to keep the peace?

The United States and the rest of the world have a vital interest in seeing Israel make peace with Syria, a country that counts Iraq and Iran among its closest friends.

The strategic importance to the United States is evident from the fact that the generals are meeting in Washington, and Israeli officials have boldly said they might seek as much as $5 billion in U.S. military aid to offset the risks of a Golan withdrawal.

Some in Israel argue that the presence of Jewish settlements on the Golan is, in itself, a security risk, putting thousands of Jews in harm’s way should Syria ever decide to retake the area by force.

The leaders who urged Jews to move to the Golan “turned a security strip into a consumer of security,” said Akiva Eldar, writing in the Israeli newspaper Haaretz. “If Syria wanted to harass Israel, the Jewish settlements would provide the temptation, as well as the target.”

“Some say, ‘Why should several thousand people threaten the security of Israel by sitting on top of this hill?’ ” said Ted Smolan, a 45-year-old computer programmer who lives in the Mevo Hama kibbutz. “But Syria does not have a good track record. Can we believe them?”

While Smolan says he’ll “do whatever the government tells me,” he would rather move than live in a settlement--however well guarded--on Syrian soil.

“I don’t particularly want to live on the edge of this cliff, surrounded on three sides by a foreign country,” he said.

Israeli officials contend that, in these days of long-range missiles, the Golan is too narrow to provide much of a buffer. But a detailed study of the security situation on the Golan by the Center for Security Policy in Washington last year argued that “even in the missile age, land--strategic depth--matters.”

And the study pointed out that having peace is better than having land “only as long as there is peace. But if war were to break out, no one can seriously suggest that Israel would be better off holding a treaty . . . than holding the Golan Heights.”

The other major consideration in the debate over the Golan is water, the most vital commodity in the Middle East.

Israel gets almost all of its water from the Jordan River valley, and the Sea of Galilee, at the river’s source, provides nearly a third of the country’s needs by itself.

Although the sea would still lie completely inside Israel’s borders, a handover of the Golan would put about half of the lakefront within a rifle shot of Syria.

That is most evident at the Peace Vista, a modern stone observation point and tourist kiosk built just 18 months ago by Joel Sheinfeld’s kibbutz with help from the Israeli government.

The 8-by-13-mile freshwater lake, more than 600 feet below sea level, can be seen in its entirety from this plateau, nearly half a mile up.

“People in the United States don’t understand,” said Sheinfeld, a 51-year-old former New Yorker, “because they haven’t seen the view from here.”