JERUSALEM -- Severe tensions produced by the U.S.-led multinational alliance against Iraq are eroding the diplomatic and political ground for any peace process here between Israelis and Palestinians, analysts on both sides of the conflict say.

President Bush has rejected efforts by Iraqi President Saddam Hussein to link Iraq's occupation of Kuwait with Israel's hold on the Palestinian-populated West Bank and Gaza Strip. But Bush has declared that once Iraq's invasion of Kuwait is reversed, a new effort can be launched to resolve the Israeli-Arab dispute. That implicit commitment has been strongly echoed by Soviet President Mikhail Gorbachev, the leaders of the European Community, and Arab states such as Egypt with which Washington is allied.

At the same time, however, the passions and alliances created by the standoff in the Persian Gulf are poisoning the shallow well of goodwill between Israelis and Palestinians here and prompting both sides to question Washington's role as a prospective broker of the peace process.

Much like Iraq's reported destruction of Kuwait, the damage here seems to grow with each passing week of the gulf crisis, making the prospect of an eventual Israeli-Palestinian peace process seem more remote. Since Iraq invaded Kuwait Aug. 2, a wave of intercommunal violence, prompted in part by Palestinian support for Saddam, has raised Israeli-Palestinian enmity to its highest point in years. Both the Israeli peace camp and Palestinian political moderates are reeling, losing ground to extremists as they question their pre-crisis convictions.

Meanwhile, U.S.-Israeli relations have reached an almost unprecedented low, while the Palestine Liberation Organization, its fortunes tied to Iraq's, has become a virtual enemy of the United States. "I don't think there's the slightest chance in the world now of movement on the Palestinian issue," said Hirsh Goodman, the editor of the weekly Jerusalem Report. "On the contrary, I think we are in for a very rough time."

A sign of the deteriorating chances for a "post-gulf" peace initiative here could be seen in Israel's dispute with the U.N. Security Council -- and the United States -- over the Oct. 8 clash on the Temple Mount, known to Arabs as Haram Sharif, in which Israeli security forces killed 20 Arabs.

Prime Minister Yitzhak Shamir, who since June has led a government in alliance with extreme nationalist parties, has defied two unanimous Security Council resolutions calling on Israel to accept an outside investigation of the clashes, despite a personal appeal for cooperation from Bush.

For many Israeli politicians, the Security Council actions represented a potential model for a peace process that could be initiated after the gulf crisis is over -- a model they do not like. These leaders say they believe the United States, as it has in recent weeks, could abandon its usual alignment with Israel and join a coalition of Arab and world powers that would press an isolated Jewish state to make concessions.

This prospect may have partly motivated Shamir's defiant posture against the U.N. investigative mission, Israeli analysts say. "Shamir's stand is a deliberate signal to the United States that it should lower its expectations," said Yaron Ezrahi, a political scientist at Hebrew University. "He is saying that the Israel that refuses a unanimous Security Council resolution on the Temple Mount is the same Israel Washington is going to find if it tries to use its international coalition to force Israeli concessions to the Palestinians after the gulf crisis."

Whether calculated or not, the Israeli signal has already been read by Palestinian leaders in Jerusalem, who say the episode has undermined any hope that the "new world order" Bush has spoken of can be applied to their dispute with Israel. "If the United States is unable to force Israel to accept a simple investigative mission after it has been unanimously approved by the United Nations, how is it going to get concessions on far more fundamental issues?" asked Daoud Kuttab, a prominent East Jerusalem journalist.

In fact, the prospects for a peace process are intimately tied to the changing relationship between Israel and the United States -- and the severe tensions the process of change has generated. In the Israeli view, Washington's alignment with a U.N. and Arab coalition against Iraq has shifted the foundations of the U.S.-Israeli relationship, which was long structured on the notion that Israel was Washington's central ally in a Middle East dominated by Cold War competition.

Although poor personal chemistry has complicated ties between Bush and Shamir, this perception of an ongoing shift in the U.S. role in the Middle East is the key source of Israel's current mistrust of Washington, Israeli analysts say. The end of the Cold War and the new alignment of forces in the Middle East have tended to draw the United States toward addressing long-submerged differences with Israel over its occupation of territory, in part because of a need to satisfy newly important Arab allies, they say.

"In the past, Israeli governments always felt they could go into a peace process with the United States firmly in their corner," said Harry Wall, the Jerusalem director of the Anti-Defamation League of B'nai B'rith. "Now it seems to Israelis that the Americans, rather than building on a joint Israeli-American approach to any peace process, are pushing a coalition that works more at Israel's expense. And if the Israeli government is not able to trust in the U.S. as a backer, I don't think we can make much headway on a peace process."

The conflict with Washington has bolstered Shamir's initially shaky right-wing cabinet. "When Israelis begin to feel that the whole world is against us, it only strengthens the Likud and the far right," Ezrahi said. "It feeds into the emotional worldview that the Likud offers Israelis, and renders the more rational arguments of the left completely useless."

Already, hard-line views have gained enormous ground among Israelis since August, spurred by both the threats of Saddam to "burn" the Jewish state and the seeming mass support of Palestinians in the territories for the Iraqi leader and his policies. Before the crisis, veteran Israeli journalist Zeev Schiff wrote, Palestinian leaders said their goal this year was to persuade Israelis that they were genuinely committed to a peaceful compromise in which Israelis and Palestinians could live side by side in their own states.

"If that was their goal, they failed miserably," Schiff, a liberal, noted bitterly in a commentary last week. "Never has that proposition been more doubtful." He added: "In the future, the Palestinians will have to contend not only with the right-wing government in Israel but with adverse public opinion across the political spectrum. The debate on the Palestinian question will be conducted from more rigid positions."

The once swelling Israeli peace camp "has been destroyed by the gulf crisis and Palestinian support for Saddam," said Ezrahi, who counts himself as a supporter of that camp. "Basically the public movement is dead and you are left with a few hard-core activists, who are confused and scared."

Palestinian moderates also are losing ground. In the aftermath of the Temple Mount clashes, radical Islamic organizations have gained prestige in the occupied territories, winning support in calls for violent attacks on Israelis with knives and other weapons.

The mood in the country has turned dark, although some see a silver lining in it. Wall, of the Anti-Defamation League, said he was struck by the "collective sigh of relief" heaved by Israelis from all walks of life when the government finally closed off the territories from Israel last Wednesday, in effect reestablishing the country's borders before the West Bank and Gaza were captured in the 1967 war. "The closing of the territories is a common denominator that has brought together the hawks and the doves and will have impetus for the leadership," Wall predicted.

"No one wants to live with this cycle of violence," he said. "I sense for the first time in this country an exhaustion with the conflict. This is not going to be a prescription for doing nothing."