The House yesterday eliminated an $8 million budget item to build schools in France for North African Jews, a day after Sen. Daniel K. Inouye (D-Hawaii) acknowledged that he made an "error in judgment" in seeking the money.

The vote was 384 to 1 with Rep. Henry B. Gonzalez (D-Tex.) voting against it. The measure now goes to the Senate.

Rep. David R. Obey (D-Wis.), chairman of the House Appropriations subcommittee on foreign operations, said he supported cutting the project because criticism of it obscured the fact that the House had trimmed $2.3 billion from foreign aid.

"If he made a mistake, it was a mistake of a good heart," Obey said of Inouye. did not solicit the funds."

The project was included in the State Department's budget for refugees, even though the American and French governments do not view the 450,000 Jews from North Africa as refugees. Many of them came to France more than a decade ago, and many have prospered.

But Inouye said the Jews from North Africa have "found themselves subject to discrimination and prejudice in France because of race, culture and national origin."

Inouye also claimed that no one from the State Department opposed the $8 million as the proposal made its way through the legislative process.

But on Dec. 18, deputy secretary of state John C. Whitehead and budget director James C. Miller sent Inouye a report saying the administration "strongly opposed" the measure.

The report said the "troublesome earmark" would fund a group "already settled in a prosperous developed nation at the expense of life-sustaining relief for refugees in the Third World."

AP-BA-02-02 1453EST