Among its many byproducts, the Persian Gulf crisis has averted what seemed just one month ago like an unavoidable confrontation between President Bush and Prime Minister Yitzhak Shamir over the Palestinian question and for the moment, at least, has virtually eliminated longstanding opposition by Israel's American supporters to major U.S. arms sales to Saudi Arabia.

Israeli public opinion remains anxious that Israel's place as the premier U.S. ally in the Middle East has been undermined by U.S.-Arab military cooperation and the exclusion of Israel from the buildup since Iraq's Aug. 2 invasion of Kuwait. More recently, talk of diplomatic solutions that would allow Iraqi President Saddam Hussein a face-saving exit from Kuwait has run counter to the Israeli view that Iraq's military power must be smashed decisively.

The Israeli government remains publicly opposed to arms sales to countries, such as Saudi Arabia, that consider themselves at war with the Jewish state.

But in a meeting last Friday with Defense Secretary Richard B. Cheney, leaders of the American Jewish community, which for the past five years has successfully fought for tight limits on U.S. arms sales to Saudi Arabia, said that American Jewry, and its powerful supporters in Congress, would not object to the sale of up to 48 F-15 aircraft between now and the end of the year.

Sources familiar with the discussion said that in exchange, the administration assured the American Jewish representatives that it will find ways to offset any threats the new Saudi F-15s might pose to Israel's qualitative edge in the Mideast arms equation. Similar assurances, the sources said, had also been given to David Ivry, director general of the Israeli defense ministry, who was here for talks this week.

The sources said how and when that offset might be accomplished is still being worked out. But they said possibilities include providing Israel with new weapons systems, such as the surface-to-air Patriot antiaircraft missile, and finding ways around budgetary constraints to increase Israel's U.S. military aid, which has been frozen at $1.8 billion a year since 1985.

U.S. officials and diplomatic sources say that since the first days of the crisis, both governments have agreed been aware of the need to put their differences, on the Palestinian question as well as the arms sales, on hold while they confront a common foe.

On Sunday, Bush sent Shamir a letter expressing thanks for Israel's willingness to be helpful in the gulf situation. According to sources, what one called "the exceedingly warm tone" of the letter was particularly remarkable because only a month ago Shamir was regarded within the administration as an untrustworthy ally whose obstructionist position on peace talks with the Palestinians had made him unwelcome in Washington.

In fact, on Aug. 1, the top priority item on Secretary of State James A. Baker III's calendar was a two-day meeting scheduled here on Aug. 9-10 with the new Israeli foreign minister, David Levy. Baker's aim, U.S. officials said, was to ascertain whether Levy was willing to respond in a positive way to U.S. desires for an Israeli dialogue with Palestinians on a new start to the Mideast peace process. If Levy's responses were unsatisfactory, officials said, the administration was prepared to put a chill on U.S.-Israeli relations that might even have included consideration of aid cuts.

A day later, though, all questions about the peace process were shunted abruptly aside as the administration found itself confronting the more immediate crisis precipitated by Iraq. Even the meeting with Levy was hastily postponed so Baker could avoid being photographed with the Israeli minister in the State Department lobby at the moment U.S. diplomats were scurrying around the Middle East trying to forge a coalition of Arab states to support Saudi Arabia and Kuwait.

Suddenly, what the United States wanted most from Israel was a low profile and avoidance of any noisy rhetorical or military responses to Iraq. At a time when Iraq was flooding the Arab world with cries of a Zionist-imperialist conspiracy, U.S. officials feared that any flexing of Israel's military muscle could collapse the fragile show of Arab unity against Saddam Hussein.

Public opinion in Israel was immediately concerned that the United States was devaluing the Jewish state as an important strategic asset in the Middle East, and might start cutting back the $3 billion in annual aid that makes Israel the largest recipient of U.S. assistance. U.S. officials said this week, however, that the Israeli public had misread the nature of the U.S.-Israeli relationship, and what had to be done to combat Iraqi aggression in the gulf.

Despite all the talk of strategic assets, the officials noted, U.S. military aid is intended to ensure Israel's security against hostile neighbors and not to create what one official called "a mercenary" to fight for U.S. interests in the region. There are potential situations -- primarily if hostilities were to spread to Jordan and Syria, which border Israel -- where it is understood by both sides that Israel would have to act. An Iraqi entry into Jordan, for example, would prompt an immediate and massive Israeli response.

Although there has always been extensive intelligence cooperation between the two, the United States has never regarded Israeli forces as a military resource to be employed in the gulf. In past crises, the United States has not even turned to Israel for indirect military support, such as the use of medical or refueling facilities, because it feared that such assistance would be outweighed by the problems it would cause with Arab governments.

But part of Ivry's mission last week was to tell Washington that Israel is concerned that lack of military coordination in the current crisis could put the two at cross-purposes, particularly if Israel felt compelled to go into Jordan.

Overall, however, while the hand-wringing in the Israeli media continues, U.S. officials and diplomatic sources say they believe Shamir and his key ministers realize that it makes sense for Israel to remain on the sidelines. For one thing, its cooperative attitude has gotten it out of the administration's dog house over the Palestinian problem. For another, it has given some new credence to Shamir's argument that neighbors like Iraq make the Middle East too dangerous a place for Israel to depend on good faith for its security.