For the second time this week, Israel's Cabinet today postponed a decision on an overall policy of building Jewish civilian settlements in the West Bank. But it ordered a ministerial defense committee to find a new site for the illegal encampment at Elon Moreh, near the Arab town of Nablus.

The Cabinet spend five hours debating the future of settlements in the first time, $8 million plan for 16 new outposts, submitted by Agricultural Minister Ariel Sharon, along with a more modest program drafted by the Defense Ministry.

The ministers voted unanimously to give themselves 10 more days before they start approving any parts of the plan although a new site for Elon Moreh may be picked within "several" days, according to Cabinet Secretary Aryeh Naor. b

In the meantime, Naor said, the attorney general's office will examine the prospective settlement sites to insure that they do not encompass any privately owned Arab land.

They significiance of the postponement is that, despite Sharon's urgent warnings that "time is running out" on Israel's ability to pursue an aggressive settlement policy, the moderates in the Cabinet were able to separate action on Elon Moreh from the broader policy decisions that will be made later.

Sharon and other hard-line settlement advocates had sought to trade off a retreat from Elon Moreh for a Cabinet commitment to an ambitious settlement program.

The ten-day deadline pushes the controversy past a crucial meeting on Sunday, when the Cabinet is expected to reshuffle its portfolios. Former Trade and Tourism Minister Yigael Hurvitz is likely to succeed Finance Minister Yigael Hurvitz is likely to succeed Finance Minister Simcha Ehrlich, who is expected to be named deputy prime minister alongside current Deputy Prime Minister Yigael Yadin.

Minister without portfolio Moshe Nissim is expected to be given the recreated Ministry of Information portfolio. But the Cabinet is likely to put off a decision about a successor to Moshe Dayan, who recently resigned as foreign minister.

The government today took great pains to emphasize that only so-called state land, or public domain land, will be used for new settlements in the West Bank and Gaza Strip. On October 22, the High Court of Justice ruled that the seizure of private land for Elon Moreh was illegal because the motive for building the outpost was political and not based on military security. The Cabinet is expected to move Elon Moreh either to an exiting Army camp at the foot of the hilltop outpost or to a site almost a mile east.

The Cabinet decision, coupled with tempered remarks of the ministers as they emerged from Prime Minister Menachem Begin's office, deflated a seemingly contrived atmosphere of crisis that has surrounded the government all week.

The increasingly strident Israeli press -- occassionally encouraged by the inflamatory remarks of some ministers -- has been feeding the crisis atmosphere with daily banner stories predicting a showdown between Cabinet hawks and moderates that could unravel Begin's hawks and moderates that could unravel Begin's fragile parliamentary coalition and topple the government.

The question remained whether the amorphous promis of more settlements would placate the most hard-line supporters of Gush Emmunim, the ultranationalist settlement movement, some of whose members have vowed never to give up Elon Moreh. The National Religious Party, Gush Emmunim's longtime ally, already has backed away from a demand that once Elon Moreh is dismantled an Army base be established on the provately owned hilltop land.

In another development terrorist bomb exploded under a passenger train entering Tel Aviv, causing minor damages. There were no injuries.