EFRAT -- Majid was a young Arab man who traveled from his home in the village of Beit Fajar each morning to work as a clerk in the supermarket of this Jewish settlement on the Israeli-occupied West Bank. He was bright and ambitious, and he soon came to the attention of Shlomo Riskin, the community's New York-born chief rabbi.

Riskin wanted to learn Arabic, and Majid offered to teach him. They would meet two or three times a week to study. Although Riskin's family was uneasy about Majid, the Friday morning lesson would always take place at the rabbi's home, where he would serve gefilte fish and other delicacies. Majid refused to take payment, but was delighted when Riskin brought him music tapes and other gifts from trips abroad.

Then one day this year a bomb went off at the main intersection outside Efrat. The military authorities told Riskin that Majid was a prime suspect. Although he was never charged, Majid left his job and vanished. Riskin never saw him again.

"Well, father," asked one of Riskin's children, "will you now stop bringing Arabs home?"

The memory of that ambiguous encounter between the rabbi and the Palestinian lingers for Riskin.

In many ways it symbolizes his community's efforts to breach the gap between Jew and Arab. And, he would concede, of its mixed success.

At first glance Efrat looks like a typical Jewish outpost in occupied territory -- ribbons of modern, box-shaped stone apartment buildings and paved roads laid across the tops of connected hills.

But this four-year-old bedroom community just south of Bethlehem does not fit many of the stereotypes commonly held about settlements and settlers. The birds who roost here are doves, not hawks. Their language is not that of Jewish domination but rather of peaceful coexistence between two peoples whose historical, religious and moral claims on the area they see as equally valid.

Unlike most settlements, there is no security fence around the perimeter of the community and many residents refuse to carry arms. "The day I have to pack a gun is the day I leave," said Efraim Zuroff, a member of the town council.

Efrat is the only settlement where residents have organized two demonstrations against Rabbi Meir Kahane's anti-Arab movement. They have also condemned settler vigilante movements, including the "Jewish Underground" whose members were convicted of plotting to kill Palestinians in retaliation for attacks on Jews. Riskin is raising private funds for a clinic that would employ both Jewish and Arab doctors and serve both groups.

"I think we as Jews have the right to live here, and I think we've got to be strong in order to protect ourselves," said Riskin, a transplanted Manhattanite who runs several religious schools and commands a growing following here.

"But at the same time, we've got to act with compassion. That's the fundamental meaning of Judaism, and if you don't understand that, you don't understand what Judaism is all about. Destiny has put Jews and Arabs together on this land from the very beginning of the Bible, and we've got to learn to live with each other."

But in an area where Arabs and Jews view each other with deep suspicion and fear, such sentiments are hard to put into practice. Bombs have exploded twice on the town's outskirts. Israeli buses and cars passing the nearby Dehaishe refugee camp are stoned regularly. A car carrying Riskin's wife and children has been hit twice.

Nonetheless, Riskin and his supporters have made a number of gestures of good will. They share their water supplies and garbage collection with two nearby villages. When Arab farmers faced harvest problems, Riskin dispatched students from his schools to help.

There have been some tentative responses from area Palestinians. Salem Takatke, head of the Beit Fajar village council, attended Riskin's installation three years ago, planted a kiss on the rabbi's cheek and prayed for peace in Hebrew as well as Arabic. He has joined Riskin in promoting the joint clinic.

But Takatke says his people still see the Jews of Efrat as usurpers who are here only because of Israel's conquest of the region 20 years ago. They draw little distinction between Efrat and the right-wing settlements such as Kiryat Arba outside Hebron, some of whose residents are in the forefront of the vigilante movement.

"As people, they're better than the other Jews in the West Bank," said Takatke of the Efratniks. "But the idea is the same as at Kiryat Arba."

Before Israel's independence in 1948, the land near Efrat was part of Gush Etzion, a bloc of four Jewish kibbutzim built on property purchased from a local sheik in 1928. Holocaust survivors helped settle the area, located off the winding, ancient highway that connects Jerusalem, Bethlehem and Hebron. In 1948 it was overrun by Jordan's Arab Legion, who killed all but four of its 152 defenders.

When Israel captured the area from Jordan in 1967, relatives of the original settlers quickly reoccupied the Gush Etzion area. Four years ago, they started building Efrat on seven neighboring hilltops across the highway. The settlers contend the hilltops were public land never cultivated by Arab farmers because they are too exposed to the raw weather.

"No one lived here before, so I'm not taking anyone's land," said Chaim Milikowsky, a Talmudic scholar from Baltimore who brought his wife and children here three years ago from Jerusalem. "We're simply reclaiming land that once belonged to us."

The view is different from Beit Fajar. Residents say there were once olive trees atop the hills, that the Army took the communal land and handed it to the settlers. "It is nonsense to say it's not Palestinian land," said Mahmoud Takatke, the council leader's brother, who served a long jail term for backing the outlawed Palestine Liberation Organization. "Efrat belongs to us."

There are 282 families here now, but planners hope to turn Efrat into a city of 20,000, which could make it the West Bank's largest settlement.

Most residents come for the comparatively cheap housing and open spaces, both at a premium in Jerusalem, 30 minutes to the north. They have an ideological commitment to the land -- otherwise few would brave the stone-throwers of Dehaishe -- but many are also committed to coexistence. Fifty families here signed a petition saying they would be willing to trade the territories for a genuine peace accord, according to settler David Bedein.

But, as in the case of Rabbi Riskin and Majid, direct links between Arab and Jew are tenuous. Zuroff said he has tried to talk politics with a few of the Arab artisans who helped build his house. "Some of them agree with me, but I'm never really sure if that's what they really feel or if they are afraid of losing their jobs," he said.

Riskin believes some of the message has gotten through. He heads a rabbinical court here that residents can turn to with local grievances. Twice in the last six months, Arab workers have brought disputes with their Jewish employers to him instead of going to the district court in Bethlehem. In one case the Arab won, in the other the Jew. "The fact that they came to me at all is very important," he said.

But the lessons of tolerance that the settlers try to teach their children can be wiped out quickly by a rock or a molotov cocktail. Riskin recalls that two days after his family's car was stoned, he had council leader Takatke visit his home to talk about the proposed medical center. "My family looked at me as if I was a traitor," he said.

The settlers say they sense fear on the part of the Palestinians who visit Efrat, a fear not of the Jews but of other Arabs. It seemed borne out on a recent afternoon at the house of Abu Anwar, the mukhtar or village leader of Beit Fajar.

A group of villagers, their shoes left at the door, had gathered in a semicircle on the floor of his receiving room to talk to a visiting reporter. There was mint tea and hospitality, but the atmosphere was tense. Mahmoud Takatke did most of the talking while the mukhtar nodded his head in agreement.

Coexistence with the Jews of Efrat was out of the question, Takatke was saying. "Their talk about cooperation is just empty words," he said. "If I come to your house and I throw you out, how can we live together after that? We all want a just peace, but peace is a faraway dream right now."

Later, after the men left, Abu Anwar had a different message. Gazing out his picture window toward Efrat, he confided that he did not agree with what had been said. He had been cautious because he did not want to be accused of betraying the Palestinian cause. Coexistence was possible, he suggested, but the process would be long and difficult.