For 16 months, President Bush rode the currents of good news here and around the world to unprecedented approval ratings, despite criticism that he was not offering the country strong leadership. Suddenly the currents have changed, raising stiff new challenges that administration officials and outside critics say will test Bush's capacity to govern in a more hostile environment.

The changes crystallized last week, with Iraq's invasion of Kuwait, a report on rising unemployment, another gloomy estimate of the mounting cost of the savings and loan bailout, a major legislative defeat for the administration on the civil rights bill in the House and embarrassing miscues by the White House and Republicans in Congress in their handling of the budget talks with the Democrats.

In the administration, officials recognize that events have turned against them. "The first year we had Jim Wright, Tony Coelho and the Berlin Wall," one official said. "This year we've got S&Ls, taxes, budget and the Iraqi invasion of Kuwait."

What is surprising, administration officials said, is how long the good news lasted, given the usual ebb and flow of events. But as Bush and his advisers fought domestic battles on a number of fronts last week while grappling with the dangers of war in the Persian Gulf, a stretched-thin White House staff began to show signs of strain and irritability.

"I don't think people are panicking," one official said. "But it's a good time for Congress to leave town."

A year ago this month it was the Democrats who were anxious to leave town and regroup, hoping to put behind them the resignations of House Speaker Jim Wright (D-Tex.) and House Majority Whip Tony Coelho (D-Calif.). Now the Democrats see the Republicans on the defensive.

"They've lost a center of gravity," said Michael McCurry, director of communications for the Democratic National Committee.

"My sense is he {Bush} doesn't look like the commander of the ship, but is bobbing in the water in a small rowboat," Democratic pollster Peter Hart said.

Administration officials, while acknowledging that events here and abroad are causing uneasiness among voters, express confidence that the public will not lose faith in Bush. "It's hard to look at a couple of weeks and say the luster is gone," one official said. "The public takes a longer view."

Even critics give Bush credit for the way he has handled some recent events. Hart said the president's swift decision to nominate appeals court Judge David H. Souter to the Supreme Court was an example of the White House controlling events, rather than the opposite. And McCurry said that Bush's initial handling of the Iraqi invasion, especially the signals sent by his meeting in Colorado with British Prime Minister Margaret Thatcher, was a plus for the administration.

"In the short term, it probably helps him," McCurry said. "Every Democrat and every American wants to be with him. . . . It also puts an awful lot of bad news off the front page."

But administration officials said privately the gulf conflict represents a long-term threat to the administration because it plays against the idea that the world has become safer and more stable with the demise of communism in Eastern Europe.

"The end of the Cold War and the victories over communism were managed well by the Bush administration, but no one thought we did anything," one official said. "So this {the Iraqi invasion} is the first test of a new situation, rather than managing something breaking our way."

The conflict in the gulf also increases the chances of a recession at home if the economic pressures on Iraq bring about sharply higher oil prices. As a result, there could be adverse political consequences even from a successful policy aimed at Iraqi President Saddam Hussein.

The bad news also has exposed weaknesses in the administration, most notably the high cost of the consolidation of power in the hands of a few officials, principally White House Chief of Staff John H. Sununu.

Sununu, Office of Management and Budget Director Richard G. Darman and a few others hold most of the power in the administration, leaving Bush vulnerable if one of them makes a bad call. "There's little independent judgment over there," a leading Republican said last week.

Even friends of the administration said there is "no relief pitching" on the White House staff, no strong bench to help carry the load at a time of crisis, causing overload at the top.

Bush also faces a more confident and increasingly effective Democratic opposition. For a president who prefers compromise, consensus and bipartisanship, the increased partisanship among the Democrats poses new problems.

The struggle over the civil rights bill illustrated this vividly. Bush sought compromise in the Senate and the House, but in the end the Democrats refused his offers, leaving the president in the awkward position of perhaps being the first president to veto a major civil rights bill. Some administration officials argue that a veto can be turned into a political victory, but it is hardly the strategy that Bush favored.

Administration officials remain confident that some of the personal characteristics that have helped keep Bush so popular -- his experience, steadiness, and candor -- will work as well in this new period as they have in the past. And they say, once he is out campaigning this fall, the case against the Democrats will appear more compelling.

But Democrats see Bush as so eager to please everyone that he is having difficultly charting a clear and consistent course. The result is an emboldened opposition and an increasingly restive GOP rank and file.

Charting a course was easier, one official said, when Bush rode with the currents. Now that he is caught in the swirl of the rapids, the consequences of misteps have increased. As Hart put it, "The cushion is gone."