UNITED NATIONS -- The United States, facing a decision in the next few days about whether to veto a Security Council resolution critical of Israel's treatment of Palestinians, must choose between further straining its relations with the Jewish state or antagonizing the Arab members of the fragile U.S.-led coalition opposing Iraq's occupation of Kuwait.

At issue is an impending vote on a proposal to convene an international meeting in Geneva to consider whether Israel is violating the rights of Palestinians in the West Bank and Gaza Strip and to appoint a U.N. commissioner to investigate alleged Israeli abuses in the occupied territories.

The proposal stems from the killing in October of 17 Palestinians by Israeli police during a rock-throwing riot in Jerusalem and Israel's subsequent rejection of a Security Council resolution condemning its actions.

The plan, embodied in a resolution put forward three weeks ago by supporters of the Palestine Liberation Organization, appears certain to win adoption by the 15-member council unless the United States vetoes it, in accordance with its past policy of opposing a U.N. role in administering the territories. In taking that position, the United States has argued that trying to interject a U.N. presence into the territories would violate Israel's sovereignty and would be a futile gesture because Israel would refuse to cooperate.

U.S. officials insist they have made no decisions, but many diplomats here say they believe Washington is inclined to depart from its past policy and withhold its veto if some of the resolution's sharper language is toned down. If the Bush administration does not veto the measure, it can expect a firestorm of charges from Israel and its American supporters that it is sacrificing Israel's interests to preserve the anti-Iraq alliance that includes such major Arab countries as Saudi Arabia, Egypt and Syria.

Israeli Prime Minister Yitzhak Shamir, speaking in Jerusalem on Thursday, accused the United Nations of meddling in his country's affairs and added: "We hope the United States is alert to this danger. . . . But apparently they don't have the strength to stand up to this trend and not be seduced by the ways of surrender, extremism and appeasement proposed by our enemies every day."

That Shamir will find support in the American Jewish community was made clear the same day in a statement by Abraham H. Foxman, national director of the B'nai B'rith Anti-Defamation League. He charged that the Palestinian resolution plays into the hands of Iraqi President Saddam Hussein's attempts to link the issues of the occupied territories and Kuwait.

"While the United States leads the struggle against Saddam Hussein, the PLO and other proxies of Iraq are trying to undermine that struggle by focusing more and more attention on the Palestinian issue, thereby diverting attention from Iraqi aggression," Foxman said. "If {the resolution} is passed with U.S. support, the Arab states and terrorists will be convinced that the anti-Israeli campaign is succeeding and that they do not have to make peace."

Nevertheless, U.S. officials acknowledge, the administration is not happy about the prospect of exercising its veto in a way that could be interpreted in the Arab world as protecting Israel against charges of violence while condemning Iraq for aggression against Kuwait.

The sensitivity of the issue was underscored last week when the PLO and three of its supporters on the Security Council -- Cuba, Yemen and Malaysia -- threatened to demand the council act on the Palestinian resolution before voting on the U.S.-sponsored resolution to authorize use of force against Iraq. But the threat did not materialize, and the council on Thursday voted 12 to 2, with China abstaining, to put a U.N. stamp of approval on military action by member states for the first time since the Korean war began in 1950.

Diplomats here from several Arab and other Third World countries claimed that the United States had avoided a divisive fight with the PLO supporters by promising to withhold its veto and abstain when the Palestinian resolution comes up for a vote.

That was denied by Secretary of State James A. Baker III at a news conference Thursday night. Asked whether the Palestinian resolution's backers were given any commitments, Baker replied:

"What we said was we would discuss with them next week in good faith the resolution which is now pending -- and which is unacceptable to the United States in its present form -- to see if we can come up with something we can support."

The potential instrument for doing that is a proposed substitute resolution introduced by Finland that considerably waters down the original offered by Cuba, Yemen, Malaysia and Colombia. Where the original endorses convening a Geneva conference, the Finnish draft merely "welcomes the idea" and calls for further discussion and study with no decisions being made until the end of the year.

Similarly, it alters the original call to appoint a commissioner to say that the council "decides in principle on the appointment" and postpones implementation of such a move by asking Secretary General Javier Perez de Cuellar to study and report on how it could be done.

Israeli officials contend that the Finnish proposals, while far less objectionable than the earlier resolution, still are unacceptable because they presuppose giving the United Nations a voice in matters that Israel considers its exclusive province.

U.S. officials said that while the Finnish draft comes closer to what the United States might regard as a reasonable resolution, its language on the Geneva conference and the U.N. commissioner still goes further than what Washington will accept.

The officials said U.S. Ambassador Thomas R. Pickering has been instructed to negotiate with council members this week to see if the language can be refined further into a resolution Washington can argue does not depart significantly from its past commitments to Israel.