JERUSALEM -- The first planned Palestinian beauty contest in the occupied West Bank and Gaza Strip has been canceled following a storm of protest from Moslem religious leaders, organizers said yesterday.

"I'm upset. Until now I don't understand this," said Musa Faron, a Palestinian businessman and cosponsor of the contest.

The contest, open to Palestinian women aged 17 to 25, would have included modeling traditional Arab clothing as well as demonstrating skill in Arab cooking and makeup techniques using natural dyes and henna.

It was canceled after Islamic leaders criticized the idea during Friday sermons at mosques in the West Bank and Gaza Strip.

In the West Bank city of Nablus, Sheik Hamid Al-Baytawi denounced the pageant as "harmful" and "offensive to the religious sensibilities of the Moslem masses."

Religious leaders in Gaza condemned it as a "deviation from religion" and called on the "guardians of young women to fight this temptation."

Secular Palestinians blamed the controversy on the growth of religious fundamentalism in the occupied territories, where increasing numbers of women are seen wearing baggy and long-sleeved dresses and scarves in keeping with the Islamic tradition of modesty.

"This was a cultural event, it was not against religion," said cosponsor Atallah Al-Najar, editor of a glossy Palestinian women's magazine, Abir.

"We didn't intend to have half-dressed women parading around, with attention focused only on their pretty faces. We planned to have the young women demonstrate their intelligence, knowledge of traditional Arab makeup, Arab food and Arab character," he said.

"It's very worrisome. Something as simple as a beauty contest is being canceled because of religious pressure," said Walid Abu Zuluf, an editor at the Palestinian daily Al Quds newspaper, which advertised the contest last week.

Al-Najar said the contest had attracted 20 Moslem and Christian applicants from the occupied territories and from Arab villages in Israel after it was announced last Thursday.

The pageant winner would have traveled to Western Europe to meet with women's groups and explain the problems facing Palestinians in the territories, Al-Najar said, adding:

"She would have been a sort of liaison. We were looking for a beautiful and clever girl who understood well our recent past and suffering under occupation.