The State Department's senior Middle East diplomat, Martin S. Indyk, is returning to his former post as ambassador to Israel at the request of Israeli Prime Minister Ehud Barak, officials said yesterday.

The unusual move demonstrates Barak's influence in Washington and his tight working relationship with President Clinton, who approved the transfer. It comes, moreover, at a critical time in peace negotiations between Israel and the Palestinian Authority, both of which have pledged to reach a final settlement by the end of next year.

Indyk, who served as ambassador from April 1995 until October 1997, is an Australian native long associated with pro-Israel causes. A former White House official, he enjoys the confidence of both Clinton and Barak--an echo of his strong ties to slain Israeli Prime Minister Yitzhak Rabin, Barak's political mentor.

Indyk, the assistant secretary for Near East affairs, will swap jobs with Edward S. Walker, a career foreign service officer and former ambassador to Egypt who serves as ambassador in Tel Aviv. The appointments are subject to Senate confirmation.

A State Department spokesman, James Foley, said Clinton decided to make the nomination on the advice of Secretary of State Madeleine K. Albright. The change was specifically sought by Barak, who knows Indyk from his previous tenure as ambassador, according to U.S. and Israeli sources who spoke on condition of anonymity.

"It's important to have a close confidant, a high-profile person who can speak directly to Barak," said an Israeli official, noting that the pace of negotiations between the Palestinians and Israel is sure to intensify in the coming months. Israeli officials also expressed hope that Indyk could use his direct line to the White House to help restart negotiations between Israel and Syria.

Indyk, 48, came to Washington from Australia in 1982 to work for a research institute affiliated with the American-Israel Public Affairs Committee, the main pro-Israel lobby in Washington, known as AIPAC. He subsequently became the director of the Washington Institute for Near East Policy, which at one time shared office space with AIPAC and whose wealthy backers included a number of prominent AIPAC members.

Indyk became a U.S. citizen in January 1993, within days of being sworn in as the senior Middle East specialist on the National Security Council. He is personally close to President Clinton--a photograph in his house shows Clinton holding his son, according to an associate--as well as to Hillary Clinton and Vice President Gore.

As the U.S. ambassador in Tel Aviv, Indyk was an essential conduit between the White House and Rabin. But Indyk never enjoyed the same relationship with Rabin's successor, Shimon Peres, following Rabin's assassination in 1995. And after Peres was defeated in 1996 by Binyamin Netanyahu, relations between the embassy and the prime minister's office nosedived, in part because the Clinton administration had openly backed Peres.

Notwithstanding his AIPAC ties, State Department officials contend that Indyk has worked hard to protect Washington's credibility as the "honest broker" of Middle East peace. According to reports in the American Jewish press, right-wing Jewish activists sought unsuccessfully to sink his nomination to the assistant secretary's job on grounds that he had shown an anti-Israel bias.

"Ambassador Indyk has a wealth of experience with peace process issues and longstanding ties with key Israeli and Arab officials," said Foley. "This switching of assignments, if you will, should be seen . . . as reflecting the consciousness on the part of the president and Secretary Albright that, indeed, this is a window that will not be open forever."

CAPTION: Martin S. Indyk, undersecretary of state for Near East affairs, will go back to being ambassador to Israel, if the Senate approves.