John McCain found himself in a familiar twilight zone for a political underdog today, caught somewhere between his lofty pledge never to engage in negative campaigning and the need to respond to an opponent's stepped-up barrage of criticism.

Appearing before a Jewish group in New York this morning, McCain was asked an open-ended question about Texas Gov. George W. Bush that all but invited him to strike back hard at the man who has been hammering his tax cut plan. The Arizona senator replied that Bush was a friend and a "good and decent person. I believe he would make a good president of the United States. I believe I would make a better one."

McCain said essentially the same thing about Bush later today at a luncheon of the Hartford Chamber of Commerce. But rumbling to the airport here aboard his campaign bus, McCain and his aides provided what they said was an independent analysis refuting Bush's latest charge, accused the Texan of running a "false" and therefore "negative" television ad in New Hampshire, and demanded that the ad be pulled from the air.

At issue was Bush's assertion, first raised during a GOP debate in Des Moines Saturday and now being repeated in the New Hampshire advertising, that McCain's plan to eliminate the tax deductibility of certain employer-provided fringe benefits would cost working Americans $40 billion over five years.

In response, the McCain campaign today produced an analysis by Fiscal Associates Inc., an Arlington economic research firm, saying that the plan would only affect employers, not employees, and that its cost would be less than $4 billion over five years.

The dispute appeared to center on a disagreement over exactly which fringe benefits would be affected. But beyond the differing assessments of dueling economists, there were political calculations being made by both sides as they approach the crucial Feb. 1 New Hampshire primary, where polls show McCain running slightly ahead of Bush.

The Texas governor's tax plan offers cuts more than twice as large as those proposed by McCain, and Bush clearly has decided that taxes--and pointed criticism of McCain's tax ideas--are winning issues in New Hampshire, a historically anti-tax state. For his part, McCain never fails to elicit applause whenever he mentions his "no negative campaigning" pledge, but he clearly felt compelled to respond to the latest Bush salvo, particularly the new ad.

But McCain stopped short of accusing Bush of running an "attack ad" or of violating their handshake agreement, made during a GOP debate in Grand Rapids, Mich., to refrain from negative campaigning. "My viewpoint is it's totally inaccurate and it should be taken down, but I can't say it's an attack ad of the level I've seen in American politics." McCain said he had a right to "respond" to Bush's stepped-up attacks, but what form such a response would take was not clear.

At a news conference this morning in New Hampshire, Bush was asked whether he was reverting to negative campaigning with the ad. "No, it's not," he said. "It's just an ad that talks about his plan. . . . What we do in the course of a campaign is, you know, lay out a plan, we put it in writing. People look at it. They scrutinize it. They analyze it. And that's what I've done."

Bush opened the news conference at Timberlane High School in Plaistow with a statement critical of McCain without any prompting from reporters. "I believe that taxing employer-related benefits is a mistake," he said. "I don't think it's good for the country."

Obviously both sides are taking the debate seriously, but at times it has been almost comical. For instance, this morning on ABC's "Good Morning America," McCain campaign manager Rick Davis suggested to Bush political adviser Karl Rove that Bush campaign officials should come to McCain headquarters in Northern Virginia for a lesson on the senator's tax plan. This afternoon, Bush economic adviser Lawrence B. Lindsey and Rep. Rob Portman (R-Ohio) trekked over to McCain's shop for a tutorial.

Staff writer Terry M. Neal, traveling with Bush, contributed to this report.

CAPTION: Senior Maggie Jones greets George W. Bush at Timberlane High School in Plaistow, N.H.