JERUSALEM, JAN. 14 -- The Israeli army, which is bracing for a possible outburst of violence by Palestinians in the occupied territories in support of Iraqi President Saddam Hussein, today was ordered by the Supreme Court to begin distributing gas masks to Palestinians to protect them if Saddam attacks Israel with chemical warheads.

Military officials said tonight that they would begin giving gas masks to Palestinians in the territories living near the border with Israel. The court acted after it was petitioned by a resident of Bethlehem, in the West Bank, whose lawyers disclosed that the army was secretly distributing chemical warfare kits to Jewish settlers in the territory while denying them to Palestinians.

The latest twist in tense Israeli-Palestinian relations came as leaders on both sides accused each other of preparing to launch violent initiatives if war breaks out in the Persian Gulf crisis. While Israeli army spokesmen said Palestinians were planning attacks on Israelis in the event of war, Palestinian politicians said they feared Israel would take advantage of any conflict to expel Arabs from the West Bank and Gaza Strip.

Israeli military leaders said they are prepared for the possibility that Iraq may begin a Middle East war on Tuesday, the U.N. Security Council deadline for its withdrawal from Kuwait, by launching a missile attack on the Jewish state. Saddam has threatened to strike Israel if it is attacked by U.S.-led forces arrayed against Iraq in the gulf.

The air force was on full alert through today, and civil defense officials called on citizens tonight to secure a room in their homes for use in the event of a chemical weapons attack.

Reuter quoted Foreign Ministry official Moshe Raviv as telling reporters: "I would say {war} is very likely. I would not say it is inevitable, but it is very likely."

Government and military officials said they would consider whether to place the country on emergency alert, which would shut down businesses and schools and mobilize civil defense forces. Today, supermarkets and hardware shops were packed with Israelis gathering emergency supplies, while the army continued the distribution of gas masks in cities and rural areas.

The Defense Ministry says it now has only 170,000 masks for the 1.7 million Arab residents of the occupied territories. The military contends that, while Israelis paid for their kits through tax assesments, Palestinians did not. The court ruling said the available masks should be given to Arabs living near Jerusalem and the border with Israel, and that the government should acquire masks for the rest of the population of the territories as soon as possible.

Army officials say they have been reluctant to give gas masks to Palestinians because of fears they will use them to protect themselves against tear gas fired by Israeli soldiers to break up demonstrations. The concern has been heightened, officials say, by statements by Palestinian leaders predicting an outburst of unrest if war breaks out.

Most of the Palestinians in the territories strongly sympathize with Saddam, in part because of his support of the Palestinian cause and in part because of his threats against Israel. As they have rushed to stock their own emergency supplies in recent days, many have said in interviews that they hope war will not begin, but that they trust Iraq will prevail if fighting starts.

Army officials have publicly warned the Palestinians that if they attack Israelis or try to interfere with Israeli military measures they will be dealt with according to "wartime rules" rather than those of peacetime occupation.

In an interview today, the army's chief spokesman, Gen. Nachman Shai, said new orders had been issued to units in the territories for dealing with Palestinian unrest. He said that while regulations governing live fire by soldiers against demonstrators had not changed, commanders would now have more latitude to place Arab areas under curfew and to close them to visitors.

Palestinian leaders have reacted to the army warnings with suspicion, saying that Israel may be looking for an excuse to crack down on the leadership of the long-running uprising in the territories or to expel thousands from the country. Over the weekend, East Jerusalem Palestinian leaders said local Arabs needed international protection.

Shai said the charges were groundless. "There is no plan at all" for mass expulsions, he said. "Nobody is thinking about something like that."