MINNEAPOLIS -- For more than a decade, northern Minnesota's farmers and ranchers have maintained an uneasy truce with the gray wolf, which is pitied by conservationists and hated by livestock owners. Now, the cease-fire that has allowed the endangered species to become a model for proposed repopulation programs in the West is threatened by its success.

Growing packs of gray wolves are inflicting a record number of livestock and domestic-pet kills on farms carved from the rocky soil of dense timberland.

The killing of a wolf in September by a farmer in southeastern Minnesota, hundreds of miles from the wolves' normal range, prompted renewed concern about the animal. Wildlife defenders said they hoped that such reactions had faded amid an upswing in public sympathy for the environment.

Farm advocates and an increasing number of conservation officials favor loosening the Federal Endangered Species Act's protection of the wolf in Minnesota to allow for a bounty season that would control the fast-growing population of about 1,600 wolves.

But environmental groups dispute claims that the gray wolf has recovered fully and say an open hunting season here would be ludicrous at a time when Congress is considering measures to reintroduce the wolf in Yellowstone and Glacier national parks and the wilds of central Idaho.

"The numbers are grossly inflated," said Minneapolis attorney Brian O'Neill, who successfully sued to stop a proposed wolf-bounty program in the mid-1980s. "If they try to make any significant changes in the recovery program, they'll be sued by the entire national environmental community."

Gray wolves, including the eastern timber wolf in the Northeast and Midwest and the northern Rocky Mountain wolf in the West, roamed the United States before settlers and government agencies began killing them systematically to protect cattle, sheep and poultry.

By 1974, when the wolf was protected by the Endangered Species Act, the population had dwindled to about 500 in northern Minnesota and a few in Wisconsin and Michigan.

Fueling the current debate is a report by the state Natural Resources Department that, under federal protection, Minnesota's wolf population has grown to between 1,550 and 1,750, well above the target set in a federally mandated recovery plan. The wolf's status was upgraded to "threatened" rather than endangered here in 1978, but the animal remains heavily protected by federal law and on the endangered list outside Minnesota.

Fifty-five farms have lost 1,300 animals to wolves this year, and 41 domestic pets have been reported killed. Authorities said wolf kills are distinctive from those of other predators, including the coyote.

The federal Agriculture Department, which can trap and kill wolves in documented cases of livestock predation, has taken 88 this year and expects to easily break last year's record of 95, said Bill Paul, district supervisor in north-central Minnesota. The state fund that pays farmers as much as $400 for each animal killed by a wolf ran out of money, less than four months into the state's fiscal year.

Clarence and Hazel Priem of Bigfork, Minn., 50 miles south of the Canadian border, said they have lost 43 beef cattle to wolves in five years. They have been able to prove loss of only two animals because wolf packs consumed even the hide and large bones, Hazel Priem said.

"If we had a grocery store and people were stealing from us, the government would find a way to catch the thief," Clarence Priem said.

Officials say some sheep farmers in northwestern Minnesota have been put out of business by wolf depredation. "Farmers were willing to tolerate a certain number of wolves, but I think that threshold's been exceeded," Paul said.

State officials want to see the Endangered Species Act amended to allow a limited wolf-hunting season here, saying that would protect farmers and head off a public backlash against the wolf.

"The wolf is managed as a museum piece," said Blair Joselyn of the Minnesota Natural Resources Department. "That's not to the ultimate advantage of the wolf."

Paul warned of increasing anti-government sentiment by farmers in his district whose cattle may be worth $1,000 a head, far more than the compensation ceiling. "Respect for the law is breaking down in the rural areas," he said. "A lot of people will just shoot a wolf and throw it in the woods."

Environmentalists respond that state officials seem more comfortable issuing hunting licenses. "Their attitude is, 'If it walks, harvest it,' " O'Neill said. "It's the old wildlife manager's attitude." O'Neill also accuses state officials of pandering to Minnesota hunters, who compete with the wolf for deer and moose.

Westerners are tracking the debate closely as the U.S. Fish and Wildlife Service pushes a plan to restore the northern Rocky Mountain wolf. The service wants to encourage packs of wolves that recently migrated naturally from Canada to northwestern Montana and central Idaho and reintroduce wolves in Yellowstone.

Long-term wolf recovery plans also call for reestablishment of the gray wolf in the Adirondack Mountains of New York state and in northern Maine. Wolf proponents received a major boost in May, when the National Park Service issued a long-awaited report supporting wolf reestablishment in Yellowstone.

Western farming and ranching groups are vehemently opposed to the plan and are focusing on the Yellowstone proposal. Wolves follow Yellowstone's elk outside the park boundaries during their winter migration and invade ranches bordering the park, according to the livestock associations.

Some livestock kills are bound to occur under the Yellowstone plan, said Steve Fritt, coordinator for the Fish and Wildlife Service of the western wolf-recovery program in Helena, Mont. But wolves have never killed significant numbers of livestock, and ranchers who could prove losses to wolves would be protected by the same depredation program that has trapped and killed problem wolves in Minnesota, he said.

"Wolf hysteria is a real phenomenon, and I've seen some near wolf hysteria out here," Fritts said. "All of a sudden, people are seeing wolves behind every bush."

The solution in Minnesota and the West is to provide more federal money for depredation control, said Ron Refsnider, wolf-recovery coordinator for the Fish and Wildlife Service in Minneapolis. The service is working with local officials to revise the wolf-recovery program that is scheduled to go before Interior Department officials in Washington for approval next year.

Congress is unlikely to amend the Endangered Species Act to allow open hunting of wolves or other threatened animals, Refsnider said. Congressional leaders who want to protect wolves, as well as the farmers whose livestock becomes their prey, must spend more money on trapping wolves that kill stock and providing better compensation to owners for losses, he said.

"Extra funding would take care of a big part of the problem," Refsnider said. "We're charged with recovering the wolf. But that requires running a program that has public acceptance."

O'Neill and other environmentalists agree that more federal money is needed to maintain the balance between wolves and agriculture. They see gray-wolf programs as rare proof that natural "charisma" can be returned to once-tamed wilderness.

"The amount of money paid out is peanuts to maintain the last major population of wolves in the lower 48 states," O'Neill said.

As wildlife advocates push to accelerate the Yellowstone plan, officials are bracing for more vehement disputes between agricultural interests and environmentalists. Lurking in the shadows of each argument, they note, is the exaggerated image of the wolf as ruthless killer.

"The folks out there spent decades and decades eliminating predators, and now the U.S. Fish and Wildlife Service is talking about bringing them back," Refsnider said. "That tends to eliminate logic from the debate."