Last week's extraordinary ouster of the U.S. ambassador to Saudi Arabia, Robert G. Neumann, at the insistence of Secretary of State Alexander M. Haig Jr. was a much more richly textured story than first reported.

The immediate cause was indeed a personal clash. But other, more serious issues were involved as well: how gently the United States should treat Israel, the thorny relationship between Haig and President Reagan's national security adviser Richard V. Allen, and the basic question of how much dissent will be tolerated in the diplomatic corps.

Neumann, like Haig, is a strong and unusual personality. Born of nonpracticing Jewish parents in Vienna 65 years ago, Neumann by his own account converted to Catholicism as a young man, survived Nazi concentration camps and came to the United States a penniless immigrant.

Aided by ambition and a keen intelligence, he rose through academic and political channels to become U.S. ambassador to Afghanistan (1966-73) and Moro"co (1973-76) and later vice chairman of Georgetown University's Center for Strategic and International Studies.

After serving as a foreign policy campaign adviser to candidate Reagan and chief of the president-elect's transition team at the State Department, the 65-year-old Neumann was named this spring to be ambassador to Saudi Arabia. This is among the most important U.S. diplomatic posts anywhere. He was sworn in May 22 and took his post shortly thereafter.

Neumann's initial relation with Haig have been described as "friendly but not close." When Haig abruptly dimissed the rest of the transition team last December, he retained Neumann in an office next to his own. Haig was wary enough, however, to arrange for sensitive visitors to enter and leave by a side door that Neumann could not see.

Reagan and many of his foreign policy associates have been considered unusually sympathetic to Israel. Neumann, with ambassadorial experience in two Islamic countries, was considered sympathetic to Arab countries. In several semi-public speeches just before moving to Saudi Arabia, he went out of his way to tell Saudis as well as Americans that a great power must have not one but many close international relationshis, thus making room for both Israel and the Arabs.

When the Israeli air force bombed Iraq's nuclear plant on June 7, a few days after Neumann's arrival at his post, he was among the first ambassadors to recommend a strong U.S. response, arguing that U.S. credibility in the Arab world was on the line. His cable reportedly made it plain he considered the initial State Department response too weak. In Washington, Haig is said to have been irritated, some say angered, by Neumann's words.

Neumann returned to Washington July 16 for consultations in connection with the controversial administration plan to sell sophisticated radar planes, the AWACS, to Saudi Arabia. The following day, Israel's planes bombed central Beirut, escalating its conflict with the Palestine Liberation Organization and generating high emotion in the Arab world. Neumann made clear to White House officials and members of Congresss he thought a strong response was required.

At 10 a.m. on Monday, July 20, Neumann called on Sen. Charles H. Percy (R-Ill.), chairman of the Senate Foreign Relations Committee and, by oft-repeated statements of both men, an old friend. During the course of a wide-ranging conversation in Percy's office, Neumann stated his concern about the U.S. response to the Israeli bombing. What the United States had said and done about it until then, in Neumann's view, was inadequate.

The ambassador, who is a outspoken man, is said by one source present and several not present to have commented in blunt terms about Haig, who has been extremely cautious about any criticism of Israel in public and reportedly in private councils as well. According to one account, Neumann said that Haig's gingerly handling of the Israeli bombing on ABC television's "Issues and Answers" the previous day had "nearly made me throw up."

This remark not in the official notes that were taken by some of the three congressional and State Department aides present, and Percy said he cannot recall it. But Haig is known to have repeated it at the White House as a large part of the explanation for his demand for Neumann's resignation, and Neumann apparently did not contest it.

At 5 p.m. on Thursday, July 24, Haig summoned Neumann to his office on the seventh floor of the State Department. The ambassador, who reportedly expected a conference on AWACS, instead was subjected to a tongue lashing from Haig about the remarks to Percy and perhaps others on Capitol Hill. Haig is reported to have been extremely angry.

As part of his dressing down, Haig is said to have accused Neumann of carrying on a "back channel" dialogue via secret cables with Richard V. Allen, the White House national security adviser, who has been a friend and sponsor of Neumann and is considered Haig's bureaucratic rival. The State Department's communications center reportedly learned of the out-of-channels' messages several weeks before, though the mesasges had been routed from Jidda direct to the White House.

A State Department source said Neumann was "quick to admit" the exchanges with Allen, but said they had to do with the proposed AWACS sale, which Allen has been assigned to shepherd through Congress, and did not involve any plotting against Haig. Later, Neumann brought copies of his "back channel" messages to the State Department seventh floor in an attempt to prove his innocence.

Haig, though angry, gave no indication that he was demanding the envoy's resignation. In fact, of course, an ambassador is the representative of the president and is named by him, and thus the secretary of state lacks the authority to dismiss him. On Friday, according to White House officials, Haig took his case to Reagan. At some point Haig also discussed Neumann with White House counselor Edwin Meese III, Allen and other senior officials.

In addition to Neumann's Capitol Hill remarks, Haig complained of the cable traffic with Allen and charged that Neumann was in disfavor with the Saudis. Haig's backing for that charge could not be learned. But the core of Haig's demand, according to several high officials, was a personal plea that Neumann could no longer be tolerated as a subordinate.

After reflection overnight, Reagan approved Haig's request for authority to Act. A week ago Saturday, Neumann was bluntly informed that he must resign or be fired.

A sparse exchange of letters was drafted, in which Neumann said "with deepest regret" that "personal considerations make it impossible for me to continue to service."

Reagan responded "with regret" that "I understand and respect . . . the personal concerns that impel you to step down from this post."

Neuman refused a demand that the resignation be blamed on the health of his wife, and struck out a sentence to that effect from the proposed letter. Nonetheless, a White House spokesman later repeated this cover story to reporters.

The news first broke early Tuesday in the Israeli press, which has unusually good access to information and gossip from official circles here regarding the Middle East.

By mid-morning Tuesday Washington was buzzing with the story. Haig, on Capitol Hill for testimony, confirmed that Neumann "has resigned for personal reasons" which "are for him to describe." Neumann, in a Washington hotel, refused all requests for comment.

The White House and State Department announced that Neumann will become a State Department "senior consultant," but it is unclear that this will come about. Neumann is expected to move back to Washington, and is likely to resume an active role in conservative academic and political circles. lIf he wishes to do so, he could cause a great deal of trouble for Haig.

It is unclear what effect the Neumann shuffle may have on the coming battle over the AWACS. Last Tuesday, the day of Neumann's official resignation, Reagan had an unannounced meeting with Prince Bandar bin Sultan, the jet-pilot son of the Saudi defense minister, and assured him that the AWACS request will move ahead this fall.

Some at the State Department believe the vanquishing of Neumann may inhibit views within policy councils that are offensive or even unwelcome to Israel. Some of Haig's aides are counted as close to the Israelis.

On the other hand, some observers believe Neumann was too one-sided and too outspoken for such a sensitive job. At this moment the Reagan administration is heading into its most important round of policy-making on the Middle East, which will make all these considerations particularly pertinent.

Some knowledgable Washington hands interpret the Neumann affair primarily as an outcropping of the Haig-Allen rivalry. "This is one more round in the endless, mutually suicidal battle between them," said a Republican observer close to the administration.

Whatever the interpretation, it is certain that the ouster of the U.S. ambassador to Saudi Arabia after only two months in office was a bizarre incident in the annals of diplomacy. As the news spread, Saudi leaders telephoned their contacts in Washington with puzzled questions about what Americans are up to now. From the far-off Arabian desert, the machinations of Washington seemed too devious, perhaps cunning, to be fathomed.