A federal jury, handing a victory to former Alexandria city manager Douglas Harman, yesterday dismissed charges by two former city employees that the city and five of its officials had conspired to hush up a sexual harassment case and permitted on-the-job sexual harassment and discrimination during Harman's administration.

The jury of two women and four men deliberated a little over two hours before returning its verdict. The decision ended a weeklong trial that aired a bitter and simmering dispute in the city over a 1983 incident of sexual harassment involving former city planner Engin Artemel.

"My stomach feels a lot better than it did a few minutes ago," Harman, now city manager of Fort Worth, said shortly after hearing the verdict.

"With the jury's decision these matters are finally behind us," said City Manager Vola Lawson, who was among the 27 witnesses in the trial. "The city is glad the lawsuit is over and pleased with the result."

The plaintiffs, former city planner Patricia Enneking, 34, and former city budget analyst Elizabeth McKenna, 32, declined to comment, as did their attorneys.

The two women had claimed that the defendants failed to investigate the 1983 incident properly, causing them emotional distress and loss of their constitutional right to due process. They had asked for unspecified compensatory and punitive damages.

The jury reached its verdict without being told that the Equal Employment Opportunity Commission, which reviewed the record of the women's 1983 sexual harassment complaints, found "reasonable cause" to believe they were "sexually harassed . . . and retaliated against" for filing the complaints. U.S. District Judge Albert V. Bryan Jr. had ruled that the EEOC findings would not be entered as evidence.

Along with the City of Alexandria, Harman and Artemel, the defendants were former deputy city manager Bradford S. Hammer, former personnel director Robert W. Burnett and former human rights administrator Stephen Levinson. All were represented by attorneys hired by the city's insurance company.

There was little dispute about the original incident: While dancing with Enneking and then McKenna at a 1983 conference in Williamsburg, planning director Artemel offended them by holding them too tight, making suggestive comments and pestering them to dance with him despite their demurrals. Personnel director Burnett disciplined Artemel with an $800 loss in pay raises, ordered mandatory counseling and gave him a permanent reprimand.

Disagreement arose over ensuing events.

McKenna and Enneking asserted that a sexual harassment complaint that they filed with Levinson against Artemel was never investigated. They also testified they complained to Levinson that Harman and Hammer, aware of Artemel's behavior, failed to intervene and joked about it.

Seeking to show a cover-up, the women's attorneys noted that Burnett's notes on his interviews with Harman and Hammer are missing and that a memo he wrote to Harman noted that his investigation could "avoid the possibility" of a human rights investigation that might include a public hearing.

Levinson denied that the women had filed a formal complaint and said that although they were unhappy with Artemel's punishment, they accepted it. In 1985 the Alexandria Human Rights Commission found that the women's complaint was properly filed and must be processed. Levinson was fired by Lawson in 1986 for sexual harassment and misconduct.

Denying a conspiracy, the defendants argued that they speedily investigated and punished Artemel; that the women's 1983 human rights complaint against Artemel had not charged Harman and Hammer with sexual harassment, but only mentioned their alleged failure to intervene and their joking.

Both McKenna and Enneking testified that they had not been denied city promotions or pay raises because they were female.