AMBASSADOR RESIGNS OVER COMMUNIQUE : SWISS DIPLOMATIC CABLE REFERRED TO HOLOCAUST GROUPS AS `OPPONENTS'.

Byline: David E. Sanger The New York Times

Switzerland's ambassador to the United States resigned Monday after the publication of a long diplomatic cable, in which he advised his government to decide how to deal with disclosures about its role as banker to Nazi Germany, and concluded with a warning that ``this is a war which Switzerland must conduct on the foreign and domestic front, and must win.''

The ambassador, Carlo Jagmetti, a longtime Swiss diplomat who was scheduled to retire this summer, also concluded his strategy paper with a warning that the groups representing Holocaust victims seeking recompense from Swiss banks are ``opponents'' who ``cannot be trusted.''

On Monday, in a letter to the Swiss president and the federal councilors who have struggled in recent weeks to contain the controversy, Jagmetti said he regretted ``having offended the sensibilities of Jewish groups and the public with some expressions in the report,'' some of which he said were ``misconstrued.''

``It was never my intention to want to gloss over events which occurred in the years before, during and after World War II or to question the necessity of openly coming to terms with the past.''

In fact, in an interview with The New York Times a week ago, Jagmetti complained that his government had vacillated between a policy of confrontation and conciliation with Jewish groups and the American officials, including Sen. Alfonse D'Amato, the New York Republican, who have pressed the Swiss government and its banks to allow a thorough review of their dealings with Nazi Germany and the accounts opened by Holocaust victims. But he had the air of a diplomat who, from a post far from his own capital, was having trouble getting the attention of his own government.

Jagmetti's memo was written Dec. 19, well before the decision by the Swiss government last week to accede to demands that it set up a compensation fund for elderly Holocaust victims who may not live long enough to see the results of historical research that is now under way in the United States and Europe.

But the Swiss government declined to say how big the fund would be, leading to some speculation that Switzerland was mounting a campaign to stem the damage to its reputation but was still wavering on how to solve what has become one of the country's biggest foreign policy crises in years.

Most of Jagmetti's cable consisted of advice that Switzerland recognize that the dispute over charges that it laundered Nazi gold and its treatment of Holocaust victims, survivors and their descendants was ``going to be a long affair'' that could take years to resolve. It will trigger, he said, ``difficult soul-searching.''

In laying out the options facing his government, he said, ``If you thought that Jewish circles and D'Amato could be quickly satisfied, and you want to do a deal to get this solved, that is one way of looking at it.'' But he doubted the questions would go away even if such a deal was struck.