Vice President Gore voiced sympathy today for Malaysia's pro-democracy forces, outraging the government and sparking a furor at the Asia-Pacific economic summit.

In a speech at a banquet attended by much of the country's ruling elite, Gore hailed "the brave people of Malaysia" for seeking reformasi, the Malay word for reform that has become the rallying cry for opponents of Prime Minister Mahathir Mohamad, who has ruled Malaysia for 17 years.

"Democracy confers a stamp of legitimacy that reforms must have in order to be effective," said Gore, who was speaking in President Clinton's place at the Asia Pacific Economic Cooperation forum of 21 nations and economies. "And so, among nations suffering economic crises, we continue to hear calls for democracy, calls for democracy in many languages -- people's power, doi moi, reformasi. We hear them today -- right here, right now -- among the brave people of Malaysia."

Gore's remarks were promptly endorsed by the White House, which said Clinton would have delivered them if he hadn't been forced by the Iraq crisis to skip the annual meeting of APEC leaders, this year hosted by Malaysia.

But the comments provoked a furious response from allies of Mahathir, a champion of "Asian values" who has long bridled at what he views as Western sermonizing about human rights and free markets.

Rafidah Aziz, Malaysia's trade minister, told reporters that Gore's comments were "the most disgusting speech I've ever heard," and she accused the vice president of "unabashed intervention in our country."

Rafidah was embroiled over the weekend in a tart exchange with Secretary of State Madeleine K. Albright, who angered the Malaysian leadership by meeting with the wife of jailed opposition leader Anwar Ibrahim.

Mahathir himself was in the audience and while he did not comment directly, he was overheard saying that "I've never heard anything so rude," the Reuters news service reported.

Mahathir's grip on power has come under unprecedented strain in recent weeks amid widespread rioting and protests over his jailing in September of his moderate former deputy, Anwar, who appeared in court with a black eye and bruises that he blamed on his jailers.

Philippine President Joseph Estrada met with Anwar's wife today.

The tempest generated by Gore's remarks overshadowed the announcement at the meeting of a U.S.-Japan initiative to help crisis-stricken Asian countries revive their moribund banking systems and ease their corporate debt burdens. The plan, which is still being negotiated, would make use of $5 billion from Japan, the World Bank and the Asian Development Bank. The United States would provide mostly technical support, although Washington promised to increase its lending to finance exports and guarantees to back foreign investment in the region.

Although Gore's confrontation with Mahathir came about somewhat accidentally, it will presumably improve his image with human rights advocates, who have scorned the vice president for nervously clinking champagne glasses with then-Chinese Premier Li Peng at a 1997 meeting in Beijing to celebrate several business deals. Ironically, Gore met today for about two hours with Chinese President Jiang Zemin in a bilateral session that Clinton was to have attended. The meeting was relatively uneventful, according to U.S. officials.

Reformasi was first widely heard earlier this year as the clarion call of the movement in Indonesia to oust President Suharto -- the languages of Indonesia and Malaysia are very similar -- and it has now become the slogan for Anwar's supporters. Doi moi, a Vietnamese term, refers to economic reform or renovation in that country. The heightened tension raised the prospect that the meeting of the APEC leaders, scheduled for Tuesday and Wednesday, could turn into a donnybrook under the chairmanship of the fiery Mahathir.

When Gore landed here today, the local papers were full of rhetorical blasts the Malaysian leader had leveled over the weekend on the failings of global capitalism. Mahathir blames currency speculators for wrecking his country's once-thriving economy by dumping its currency, and there is speculation that he may try to use the leaders' meeting to defend or promote the controversial controls he has slapped on capital flows in and out of Malaysia.

The U.S.-Japan debt proposal was first announced in Gore's speech, although it was outlined in somewhat more detail in a joint statement issued by Clinton and Japanese Prime Minister Keizo Obuchi.

"This is not going to revolutionize Asia; it's not a big bang solution," said a senior U.S. official who briefed reporters. "But it's a modest, quite sensible set of initiatives that go to the core of the challenges facing the region."

The proposal is aimed mainly at alleviating the problem of Asian banks being unable to lend because so much of their capital has been eroded by the failure of borrowers to repay. To jump-start Asian economies, the $5 billion from Japan, the World Bank and the Asian Development Bank would be used to help pump more capital into banks, provided the country receiving the aid adopted policies aimed at prodding companies to restructure their debt burden.

The question of who would provide what portion of the $5 billion remains to be negotiated at a meeting in Tokyo next month. But the money would be used to partially guarantee bonds that a country could issue for purposes of recapitalizing its banks. If the plan works well, it may be beefed up with more funds.

Some of Japan's contribution to the package is likely to come from a $30 billion fund for Asia that Finance Minister Kiichi Miyazawa unveiled last month. CAPTION: Malaysian leader Mahathir, left, listens as Vice President Gore, right, delivers a speech in which he praised Malaysians who are demanding reforms. ec