When Archbishop William J. Levada arrived in San Francisco nearly two years ago, many within this city's vast gay community saw it as an ominous sign.

Levada was a rising and ambitious figure within the conservative ranks of the Roman Catholic hierarchy. The man he was replacing, John Quinn, had been hailed as a voice of moderation, a barrier against the increasingly traditionalist winds of the Vatican. This irreverent city braced for a conservative storm.

It took a couple of years to develop, but gay activists say they believe that storm has arrived. Levada is squaring off with the city over a law that would advance gay rights, and many see the battle as emblematic of a sea change in the relationship between the Catholic Church and its less conventional followers.

"Part of Levada's mandate is to straighten out San Francisco, pun intended," said Jeff Sheehy, a former altar boy from Waco, Tex., who heads the San Francisco Lesbian, Gay, Bisexual Democratic Club. "Quinn was much more conciliatory. He had this bizarre belief that Jesus came for everybody, that anybody had a shot at salvation. Levada seems to think that gay people are Satan's children or something."

Levada believes he is being mischaracterized, but he isn't backing down on his stand against the municipal law.

"I am not anti-gay," he said at a news conference today. "I have received not the least hint from anybody, the pope or anyone else, about what my instructions are here, except to be what a bishop is supposed to be -- a shepherd for the people. . . . I recognize that many of the Catholics of this city are gay and lesbian persons. They are welcome in our churches."

He reiterated his threats to sue the city if it won't exempt Catholic Charities -- which serves AIDS patients and the poor -- from a new law that would force any organization that does business with the city to extend job benefits to the unmarried partners of their employees, gays included. Catholic Charities, because it has more than $5 million worth of contracts with the city, would be forced to comply.

"To seek to equate domestic partnership with the institution of marriage and family runs contrary to Catholic teaching, indeed to the beliefs of most religious and cultural traditions," Levada said, adding his feeling that many gay men and lesbians understand the sanctity of traditional marriage. "It's important for the sake of the future of civilization."

Square-built and balding, the 60-year-old Levada is not shy of the limelight, in contrast to his predecessor. Cerebral and introverted, Quinn kept a low profile, rarely triggering conflict. He was known to attend services at Most Holy Redeemer Church in the Castro district, where some 90 percent of the parishioners are gay. Under Quinn's tutelage, the church assumed a central role in caring for those stricken with AIDS.

The new archbishop spent six years at the Vatican's Congregation for the Doctrine of Faith, which has been portrayed as Pope John Paul II's vessel to eliminate liberal tendencies from the church hierarchy. While there, Levada worked under Cardinal Joseph Ratzinger, who has characterized homosexuality as a disorder. At his news conference, Levada declined to discuss his relationship with Ratzinger or his views on the elder prelate's writings.

Levada had his scrapes with the gay community in Portland, Ore., where he was archbishop for nearly a decade before coming here. He drew the ire of gay activists there after evicting the Portland chapter of Dignity, a national gay Catholic organization, from the St. Francis parish, where the group had been holding a weekly Mass for years. Levada then launched a gay outreach that amounted to a 12-step program for "curing" homosexuality, said Jerry Deas, a member of Portland's Dignity chapter and the group's national director.

"When I heard Levada was going to San Francisco, my immediate reaction was, Boy, it's really going to shake that place up,' " said Kristine Chatwood, who writes for Just Out, a gay newspaper in Portland. "The Vatican's certainly sending the message there."

San Francisco is, of course, a unique sort of place. Where else is it front page news, as it was here, that the latest appointee to the city's Board of Supervisors is an openly "straight white male"?

Back when Levada was named archbishop and the talk turned to his alleged conservatism, Herb Caen, the legendary San Francisco Chronicle columnist who died last week, wrote that he heard an observer remark, "In San Francisco, a conservative cleric is one who wears flats instead of heels."

San Francisco's Catholics say there is a long-standing tradition of accepting the city's myriad alternative lifestyles by looking the other way. To many of the city's gay Catholics, the archbishop's stand has come as a slap in the face, a reminder that the church hierarchy condemns their lifestyles, even as it welcomes them into its congregations. At Most Holy Redeemer Church, the Rev. Zachary Shore worries he may lose some of his congregation as anger over the archbishop's stand filters through the community.

"Whenever Rome says anything about homosexuality, or whether it's the archbishop of San Francisco, the gay community is always going to react like that," Shore said.

In his congregation are gay couples who have been together for decades and who see themselves as no different from heterosexual couples in committed marriages. For Shore, it is a thorny subject. "I do marvel at them; I do praise them," he said. "But there's no way that I can acknowledge that, or bless that." CAPTION: San Francisco Archbishop William J. Levada holds a news conference on benefits issue.