JERUSALEM, SEPT. 3 -- Though the specter of Saddam Hussein frightened off two guest artists, a major exhibition of drawings and more than half of its American patrons, the Israel Museum today unabashedly launched a gala celebration of its first 25 years, during which it has covered a Jerusalem hilltop with one of the Middle East's richest cultural complexes and endured countless regional crises.

The focus of the three days of parties, tours and ceremonies here was to have been the inauguration of the $11 million Nathan Cummings 20th Century Art Building, which gives the museum 48,000 square feet of new exhibition room for its collections of modern paintings, drawings, designs and photography and completes the original master plan for its sprawling campus of white stone buildings.

But as a dramatically smaller than expected crowd of foreign donors, journalists and guests gathered on the windswept plaza in front of the new pavilion this afternoon, there was as much celebration of the institution's perseverance in the nasty climate of the Middle East as of its airy new galleries, which were designed by the Danish architect Jorgen Bo.

"When we opened the museum, we were only two kilometers from a hostile border, from a hostile army, and people said, 'How dare you bring works of art so close to danger?' " said Teddy Kollek, the longtime mayor of Jerusalem and founding father of the museum, in his address, referring to the days in the 1960s when Jerusalem was still divided into Israeli and Jordanian sectors. "Now you are seeing the completed museum, you came here and forgot all the terrible media and newspaper stories about the dangers of coming to Israel, and we are sitting here on a beautiful place in the sunshine."

To the chagrin of Kollek and museum directors who devoted years to preparing for this week's events, the patrons and artists who ignored Israel's precarious perch on the sidelines of the Persian Gulf crisis were well outnumbered by those who decided not to risk the trip to Jerusalem. Above all, the museum's American friends bailed out: Only 130 of an expected 350 donors, artists, dealers and collectors turned up for the festivities, and a major collection of master drawings due to be exhibited in the new pavilion was withdrawn by its owners, the Ian Woodner family, just before it was to be shipped to Israel from the Metropolitan Museum in New York.

"We worked two years to put this together, and then just watched it fall apart," said Maureen Cogan of New York, the president of the American Friends of the Israel Museum. "A lot of collectors and a lot of dealers were going to come to Israel for the first time to see the museum collections, people who were new to us. But then, with CNN going on about Iraq and the crisis 24 hours a day, seven days a week, there was a feeling that we were going into a war zone. I don't blame them for canceling."

Some of the Israelis took a less charitable view of the American no-shows. "You know, most of the Europeans came. It's only the Americans that backed out," said Suzanne Landau, the museum's curator of contemporary art. "I think it's because Americans are more open to the influence, or even the brainwashing, of television and the media. The Europeans managed to keep perspective on it, but the Americans just panicked."

Even with the crisis-induced fallout, Kollek and the museum's longtime supporters seemed to have much to celebrate from the perspective of 25 years. Depending overwhelmingly on donations (most of them foreign) of money and materials and overcoming indifference and occasional resistance from Israeli governments, the institution has managed to assemble what its director, Martin Weyl, says is arguably "the largest museum between Rome and Tokyo."

The centerpiece of the collection, housed in its own, distinctively cone-topped pavilion, is the Dead Sea Scrolls, the ancient biblical Jewish manuscripts recovered from caves near the Dead Sea. The museum also includes a large archaeology department, with thousands of items from biblical and Roman times found in excavations around Israel, and perhaps the world's richest collection of Judaica.

"Twenty-five years ago this museum was a dream to be realized," said Kollek. "Now it is finished, and we are very pleased with it. We only erred in one respect: We thought we would have 250,000 visitors a year, and instead we have 1 million visitors a year."

The new Cummings building will provide space for collections that until now competed for space in a single, cramped gallery with the museum's store of 19th-century and impressionist painting. Though its collection of modern paintings is relatively modest, the museum has an extensive archive of about 50,000 drawings and prints as well as another collection of more than 40,000 photographs, both of which will now have permanent exhibition space of their own.

Among the paintings on display in the new building today was a group from the collection of the film producer Sam Spiegel, which Israel just inherited. They include works by Cezanne, Monet, Gauguin and Picasso, and the first paintings the museum has obtained by Bonnard and Rousseau.

The museum also obtained a series of avant-garde works from European and American artists that sprawls across the top floor of the Cummings building. But one new work, by American artist Dennis Adams, suffered a bizarre accident: It was struck and destroyed yesterday by a reckless Israeli driver. Adams had created an aluminum bus stop outside the museum's main entrance, featuring dramatic pictures of the 1981 evacuation of Israeli settlers from the Sinai Peninsula.

After it was crushed by the car yesterday, museum director Weyl said, the museum had a problem: "We had to try and convince the Israeli police it was valuable art, and not just a bus stop."