Vice President Bush's chief of staff, Craig L. Fuller, has testified that he realized after he and Bush met with an Israeli official in Jerusalem in 1986 that there was a link between delivery of U.S. arms and release of American hostages, a transcript of the year-old testimony shows.

Fuller's statement, part of his deposition to a closed session of the congressional committees investigating the Iran-contra affair, was released to NBC News yesterday. Fuller's account conflicts with Bush's statements that he did not understand the July 1986 briefing and did not realize the Iran "initiative" was arms for hostages until December 1986, following a briefing by Sen. David F. Durenberger (R-Minn.), then chairman of the intelligence committee.

Fuller also told the committees that before the July 1986 meeting, former White House aide Lt. Col. Oliver L. North said that Bush was "fully aware" of the sale of arms to Iran. Bush later said he was surprised North had told Fuller about it, according to Fuller's testimony.

In his autobiography released earlier this year, Bush wrote that he felt he had been left out of the key meetings in the Iran arms affair and deliberately kept in the dark.

Fuller said yesterday that his deposition was "entirely consistent with everything I have said and in no way conflicts with what the vice president has said."

He told NBC News yesterday that he was speaking for himself and not the vice president in his deposition.

During the closed session, Fuller told the committees that the July 29, 1986, meeting between Bush and Israeli counterterrorism official Amiram Nir was arranged by North.

North had called Fuller, who was traveling with Bush, on July 24, the day the Rev. Lawrence M. Jenco, an American who had been held hostage in Lebanon, was released, in order to arrange for the vice president to talk to Jenco.

Four days later, North called Fuller again to arrange for the meeting with Nir. At that time, North told Fuller for the first time about the hostage initiative. North "realized that I may not know a lot about the program," Fuller said, "but that the vice president was fully aware of it." North also asked to be briefed on the meeting after it occurred.

When Fuller later told Bush about North's call, "the vice president indicated that he was a little surprised that Col. North had given me any background on the nature of the classified program since the information about it had been strictly limited."

In a subsequent telephone conversation between Bush and North, "it was agreed that I would attend the meeting and take thorough notes of what was discussed and brief Col. North following the meeting," according to Fuller's testimony.

At the time, North and then-CIA Director William J. Casey were attempting to persuade President Reagan to change policy and send an arms shipment to Iran as a response to the release of Jenco.

In the meeting with Bush, Nir contended that because of the release of Jenco, the United States had to reconsider its position that it would not send any more arms to Iran without the release of all the hostages, according to notes Fuller made of the meeting.

The next day, after Fuller said he called North to tell him about the meeting, Reagan approved the shipment.