LOD, ISRAEL, AUG. 31 -- The sliding doors of the huge aircraft hangar were closed, and most of its workers were outside demonstrating. But inside, a 35-year-old aeronautics engineer named Yossi sat silently under a prototype model of the Lavi jet fighter, fingering a small collection of rubber hoses hanging from its belly and contemplating the death of a project that had been part of his life for half a decade.

"It's been my baby for the last five years," he said of the Lavi, which was shot down by the narrowest of margins, 12 to 11, in a surprising Cabinet vote yesterday. "I was shocked. It's hard to let go of your baby."

Today was a day of angry protest and stunned silence at Israel Aircraft Industries, as some of this country's most highly skilled workers sought to grasp and cope with the Cabinet decision that could put thousands of them out of work as well as alter Israel's cherished self-image as a high-tech, though pint-sized, superpower.

Some reacted violently, blocking main roadways in Tel Aviv and Jerusalem and the highway connecting the two cities, using burning tires as barricades and causing massive traffic jams during morning rush hour.

Others like Yossi were more passive, still soaking in the news that the Cabinet had decided to kill a project that had become the national equivalent of the American space-flight program.

"I have never witnessed this much silence," said Phil Hermann, a deputy spokesman at the state-run aircraft factory. "There's a completely muted reaction. It's disappointment, pure and simple."

Standing inside the Prototype Development Center hangar, Hermann added, "Ten days ago the cream of the technological brain power in this country were in here crawling all over this equipment. In fact, you couldn't see the airplanes for all the people. Now the doors are locked. I think that tells the whole story."

The Cabinet decision generally fell along party lines, with Foreign Minister Shimon Peres' Labor Party voting to scrap the project while Prime Minister Yitzhak Shamir's Likud voted for continuation. But the crucial vote to kill the Lavi came from Likud Finance Minister Moshe Nissim who argued, along with most of Israel's military general staff and many economists, that the project was simply too expensive to continue and could drain funds from other essential new weapons systems.

That view had strong support from the United States, which had paid most of the $1.5 billion already invested in the project and had warned that it would not bail out Israel in the event of further cost overruns, estimated in some quarters to be as high as $250 million a year. American officials have promised that some U.S. funds can be used to cushion the economic blow that cancellation could cause at Israel Aircraft Industries and other defense contractors here.

To supporters of the Lavi, yesterday's decision was a cold dose of realism, "a tacit admission," said Jerusalem Post commentator Shlomo Maoz, "that Israel cannot keep advancing toward higher and higher standards of living while maintaining the world's highest defense budget."

"This is a climb down toward becoming a more normal nation," Maoz wrote. "It has been done with a lot of pain, but that was the only way to stabilize our economy for the long run."

But to the skilled workers of Israel Aircraft Industries, the vote means a loss of jobs and a national surrender. The Lavi to them was more than a project. It was a symbol of Israel's commitment to high technology and to stemming the brain drain of skilled defense workers to higher paying and more challenging positions in the United States and Western Europe.

"In my opinion, it's not a question of jobs, but a question of the attitude and face and future of Israel," said Uri, 38, a Lavi project engineer. For security reasons, Israel Aircraft Industries' employes are not allowed to divulge their last names.

"What hurts me the most," he said, "is that I'll not be able to find my future in the kind of Israel that our government is leading us to."

Supporters of the decision contend that it will cost fewer than 2,000 jobs, but company officials and union members say the final layoff total could run between 3,000 and 6,000 jobs. Many of the workers are between the ages of 25 and 40, according to company officials, and are considered vital to future defense projects. But many of the workers said they are already considering leaving Israel.

Workers' committee leaders met with Shamir today and asked him to freeze the Cabinet's decision for three months while studying alternatives to scrapping the program. They said Shamir took the proposal under advisement. Meanwhile, the program's most dedicated proponent, minister without portfolio Moshe Arens, said he would postpone his decision to resign from the Cabinet pending reconsideration of the project.

Peres told Israeli radio that the decision to scrap the plane "was an infinitely difficult decision for me . . . because this is a plant which is very dear to me -- in fact, I laid its foundations, I was its founder. I see friends and employes before me. It was not a simple decision. But after I considered it over and over, I reached the conclusion that this proposal was a plan to save {Israel Aircraft Industries}, and not to harm it."

But many workers said they will hold Peres responsible for the brain drain that the cancellation may cause -- a prospect that delighted some Likud supporters.