NEW YORK, DEC. 24 -- The Dow industrials slipped 12 points in sparse, pre-holiday trading today.

The Dow initially fell 15 points -- in line with losses in an equally thin U.S. bond market -- and moved sluggishly in a narrow range for the rest of the day.

The New York Stock Exchange closed early at 2 p.m. for Christmas Eve, after only 4 1/2 hours of trading, instead of its normal 6 1/2-hour session.

The initial Dow loss, which set the tone of trading for the day, reflected not only a down bond market -- where the U.S. long Treasury was already off 20/32 on supply worries as stocks opened -- but also a renewed focus on the Middle East.

The U.S. long bond was down more than a full point by midmorning, and posted a 27/32 loss as stocks closed, primarily reflecting attempts by dealers to clear away supply ahead of upcoming Treasury auctions.

New warnings from Israel this morning didn't help matters. Prime Minister Yitzhak Shamir said Iraq's threat to attack Tel Aviv without provocation, in the event of a Middle East war, would bring swift and decisive reprisal. Later, reports that Iraq had recalled its ambassadors to both the United States and the United Nations only served to heighten the sense of anticipation as the Jan. 15 U.N. deadline for an Iraqi withdrawal from Kuwait draws closer.

But other observers, commenting on the thin nature of trading, said the Shamir statement was merely a "good reason" for day-traders to move the sluggish, pre-holiday market in the absence of more meaningful news.

Among Dow components at the close, Coca-Cola dipped 1 1/8 to 47 3/8, but other changes were fractional.

Among stocks in the news, Pan Am Corp. slipped 1/4 to 1 1/4 after news that the A.I. Leasing II subsidiary of European aircraft-manufacturing consortium Airbus Industrie had terminated operating leases on 21 Pan American World Airways aircraft. The news underscored the company's cash-poor condition and its need for a bridge loan from TWA before merger talks with that airline can progress after the holidays. TWA finished the session down 1/8 at 6 7/8.

Money-center banks remained prominent on the most-actives list, although price movements were generally minimal. Manufacturers Hanover finished down 1/8 at 23 7/8, J.P. Morgan down 1/8 at 46 1/8 and BankAmerica down 1/8 at 27 3/8. More volatile Wells Fargo, however, lost 1 5/8 to 58 3/8.

The Dow transports eased 3.00 to 920.91, while the utilities slipped 0.69 to 210.70.

At the close, the Dow stood at 2621.29, down 12.37, while declines outpaced advances on the Big Board by a ratio of about 8 to 5 on light volume of 56 million shares, compared with 233 million shares on Friday and 174 million on Thursday. Among broad indexes, the Standard & Poor's 500 was down 1.85 at 329.90, the NYSE Composite shed 0.86 at 180.01, the Value Line fell 1.10 at 239.77, the Amex Market Value was off 1.61 at 304.59 and the Nasdaq Composite dropped 1.20 at 372.40.