ISRAEL AND SYRIA continue to be caught up in a test of wills that could yet produce a nasty war. Their mutual dilemma came out of the withdrawal agreement Israel concluded with Lebanon nearly a month ago. The Syrians, feeling isolated, stiffened; whether this was by way of preparing themselves for battle or (as the U.S. government still hopes) for negotiations of their own with Lebanon is unclear. The Israelis also stiffened: perhaps to intimidate Damascus, probably just to show they would not be pushed around.

The Syrians, like the Israelis, keep their armed forces under tight discipline. That Syria has restocked its air defense with improved equipment manned by thousands of Soviet advisers, however, raises the question of whether Damascus might get a bit bolder. The Kremlin was disgraced as Syria's patron last summer, and its evident eagerness to recoup its prestige is not helpful now.

Meanwhile, the Syrian government, as part of an intra-Arab argument with Yasser Arafat, is helping to sponsor a mutiny against him by PLO units in the Syrian-occupied part of Lebanon. The PLO units are protesting against an Arafat strategy that they believe denies them further armed confrontation with Israel. So they have both the location and a possible reason to shoot at Israeli soldiers. It's dangerous.

It has become fashionable to say that the United States should have drawn Syria into a Lebanon negotiation last year before Moscow had the chance to move back in. But that assumes Syria would have been ready to negotiate from weakness. As it is, the Syrians need to be told by their friends that they are in a much better position now to talk than to fight.

The new Soviet equipment and advisers would doubtless raise Israel's costs in a war, but Israeli forces would still have marked advantages. For one thing, Israeli guns already cover Damascus. Syria can see that only a few Arab crazies--Libya, South Yemen--support its denunciation of the Israel-Lebanon accord. All the other Arab states favor a Syrian deal with Lebanon in order to make Lebanon a buffer between Syria and Israel and to put the governance of Lebanon back in the hands of the Lebanese.

That Israel has reason to quit Lebanon is plain from the bitterness of much of the Israeli public at the high casualties and arguable political gains of the invasion of last June 6. The casualties, which continue, are compelling Israel to consider an early unilateral withdrawal to a less vulnerable, more sustainable line halfway back to its own territory.

Such a withdrawal would only highlight Syria's inflexibility. Everyone in the Middle East understands that Syria demands a special position in eastern Lebanon. But does it demand an indefinite occupation? One that leaves Israel with a strategic advantage? One that plays directly into the hands of Israeli West Bank annexationists? That tends to keep the United States firmly at Israel's side while the area keeps worrying constantly about war?