American Jewish leaders denounced an Israeli policy of officially identifying converts who have immigrated to Israel and compared it with the Nazi requirement that Jews wear armbands displaying a yellow star.

"This ugly and humiliating requirement flies in the face of 3,000 years of Jewish tradition," said Rabbi Alexander M. Schindler, president of the Union of American Hebrew Congregations and leader of 1.5 million Reform Jews. "From the earliest days of our people, those who converted to our faith were regarded as fully equal," he said. "All were children of Father Abraham."

The issue grew out of a controversy between the Interior Ministry and Shoshana Miller, an American Reform convert. When Miller, who emigrated to Israel last year, was told her certificate of conversion signed by a Reform rabbi would not entitle her to Jewish identity in Israel, she sued the Interior Ministry, with support from the American Reform movement.

The High Court of Justice ruled Monday in favor of Miller. The ministry issued her an identity card, but at the same time launched a new procedure in which persons converted by other than Orthodox rabbis would be "requested" to appear before a board of Orthodox rabbis to examine the authenticity of their conversion. Identity cards "This ugly . . . requirement flies in the face of 3,000 years of Jewish tradition." -- Rabbi Alexander M. Schindler of such persons would be stamped "Jewish (Converted)."

The conflict is part of a continuing effort of Reform and Conservative Judaism to attain equal status in Israel, where Orthodox interpretation of Jewish tradition is the sole criterion in determining who is a Jew in vital areas of life. Orthodox rabbis, for instance, will not marry two Jews if one has been converted under Reform or Conservative auspices.

"Under Jewish law, converts are Jews, and in no way should be distinguished from other Jews," said a statement issued by the executive council of the Rabbinical Assembly, which represents the United States' 1.2 million Conservative Jews. It called the move a "reprehensible action."

Kenneth J. Bialkin, chairman of the Conference of Presidents of Major Jewish Organizations, an umbrella group of about 40 Jewish organizations, said the issue could seriously harm "the unity of Jewish people."

"Israel's friends everywhere are deeply disappointed by all those actions, whether from left or right, that divide the Jewish community and challenge the Jewish tradition of tolerance, understanding and respect for the rule of law," he said.

The order was being debated this week by the Knesset, Israel's parliament, and was to be discussed by Israel's cabinet this weekend. "I have every confidence that this latest insult heaped upon the Jewish community by a small Khomeini-like minority will be rejected by Israel's Knesset and repudiated by Israel's people," Schindler said. The council of U.S. Conservative Judaism called the order an "unconscionable ruling," and urged Israel to continue accepting converts of recognized rabbis.