JERUSALEM, JAN. 17 -- The Israeli Cabinet resumed discussion in its weekly meeting today of the continuing disturbances in the occupied West Bank and Gaza Strip, which in less than six weeks has become a nasty and nagging fixture on the political agenda.

Restoring law and order, which has been the top priority for both Labor and Likud partners of the coalition government here since the violence broke out on Dec. 9, was not mentioned in today's official Cabinet communique.

The statement was limited to an expression of "esteem and support" for the Army and police for their efforts to quell Palestinian protests and contained no further details of plans for dealing with the unrest.

Despite earlier assurances by the government that the situation would be brought under control, protests and violence have continued, although today appeared to be the quietest day in the occupied territories since the unrest began, according to Army descriptions.

On the West Bank, a Palestinian was wounded by Army rubber bullets, and near Nablus a gasoline bomb set on fire a bus driving to pick up Palestinians who work in Israel.

Israeli military authorities allowed United Nations food and medicine into two Gaza Strip refugee camps. Curfews imposed on seven of eight camps in Gaza had prevented inhabitants from buying food or receiving medical care for several days, which elicited a protest yesterday from a U.N. relief official in Gaza.

{The Army said today that it lifted curfews from all 15 refugee camps in the West Bank, The Associated Press reported.}

Meanwhile, a business strike continued in East Jerusalem, Gaza and many West Bank towns.

The Army's failure to stamp out the disturbances appears to have cracked what political unity remained in the coalition government. Maverick politicians, jockeying for advantage in elections next October, have begun to question the wisdom of the official "iron fist" line.

At today's meeting, Education Minister Yitzhak Navon, a Labor Party member, questioned Defense Minister Yitzhak Rabin about why it was necessary to send armed police Friday onto Jerusalem's Temple Mount, site of the third holiest shrine in Islam. The police action, involving use of clubs and tear gas, has become highly controversial.

Rabin said the police were needed to quell disturbances and that demonstrators had put Israeli police at risk.

The Cabinet strongly denied that the action, in which police entered the Dome of the Rock and Aqsa mosques inside the Temple Mount compound, had defiled Moslem holy places. The Cabinet said demonstrators inside the compound had defiled those places by dragging a policeman inside and beating him.

The police minister also strongly denied that police had fired tear gas inside, rather than outside, the mosques, despite reports to the contrary by witnesses.

{In Rome today, Pope John Paul II said Israel had to respect the rights of Palestinians and condemned Israeli police action against worshipers at the mosques.}

Possibly symptomatic of a changing Israeli mood was the reappearance of Peace Now, an activist peace movement favoring territorial compromise. Virtually silent since the unrest began, Peace Now resumed activity by staging a demonstration outside Prime Minister Yitzhak Shamir's office.

Ezer Weizman, minister without portfolio, proposed that the Labor Party launch an immediate peace initiative because "we must not let the ostriches in our midst gain sway. They are dangerous birds, much more so than the hawks."

Although Rabin is also a Labor minister, he has taken a hard line on the disturbances similar to that of Shamir, the Likud leader.

Weizman, challenging Rabin for "doing Likud's dirty work," was quoted as saying, "I'm not afraid of talking to any . . . Ahmed, Mohammed or Abdul as long as they recognize me, cease firing at me and are prepared to live in peace with me. Their past is irrelevant."

Palestine Liberation Organization leader Yasser Arafat last week said he would recognize Israel's right to exist under certain conditions, including the PLO's inclusion in an international peace conference.

Weizman's comment was viewed here as a hint that he might be willing to deal with the PLO -- which would represent an extreme position for Labor.

Meanwhile, Shamir's doctrine that Israel must never give up permanent control of the occupied territories came under attack from within his own party. Shlomo Lahat, Likud mayor of Tel Aviv, challenged his party's doctrine by announcing that Israel should give up all the land occupied in the 1967 Arab-Israeli war except for East Jerusalem. Another Likud maverick, Moshe Amirav, persuaded four colleagues to sound the same call in a letter to Shamir.

Such dissent appeared to signal concerns among politicians that public support is waning for the government's hard-line, law-and-order approach to the disturbances.

Rabin last week proposed that Israel "create conditions" for local Palestinians to come forward and eventually negotiate the future of the territories.

Elias Freij, the Christian mayor of Bethlehem and a well-known moderate, sought last night on Israeli television to get the occupied territories' message across. Long identified with Jordan and often on good working terms with the Israelis, Freij said, "All the Arab governments are united in their support for the PLO as the legitimate representative of the Palestinian people."

"Any local leadership" agreeing to deal with Israel "will be rejected and considered as collaborators," he said. "The idea of local leadership is not a possibility."