CLINTON, NETANYAHU SHIFTING GEARS FOR NEW DIPLOMATIC ERA.

Byline: Elaine Sciolino The New York Times

There was a time in 1990 when Benjamin Netanyahu, as Israel's deputy foreign minister, was so out of favor with the Bush administration that Secretary of State James A. Baker III banned him from entering the State Department.

The Clinton administration, in its turn, never disguised its desire - indeed, its expectation - that Prime Minister Shimon Peres would defeat Netanyahu when it came to a vote. Dennis Ross, the chief negotiator on the Middle East for Presidents Clinton and Bush, was so certain of a Peres victory that he already had planned a celebratory post-election trip to the region.

Peres has legions of friends in the Republican and Democratic diplomatic establishments. Netanyahu and Ross have disagreed sharply on most aspects of the peace effort in the Middle East.

But now Netanyahu, 46, leader of the Likud Party, is the prime minister-elect. And the United States must seek to develop close ties with a man it had largely dismissed as an irritating obstacle to peace.

Anxiety in both Washington and the Arab world about the policies of the incoming government is running so high that even negotiations over creating a system to monitor the cease-fire in southern Lebanon have been suspended.

Netanyahu never made a secret of his disappointment in the administration, which he said did not give him the respect he deserved as the Likud leader. Now Netanyahu and his team are clearly reveling in the power of their new relationship with Washington.

``I'm sure people in the White House realize they may have made a mistake in being so vocal in at least creating the impression of being in the corner of Mr. Peres,'' said an unidentified Netanyahu adviser. ``This is something Mr. Clinton and others in the administration will want to clear up as quickly as possible. This may give Netanyahu an initial advantage.''

Both the American and Israeli sides say there is every reason to believe that Clinton and Netanyahu will get on well, pointing to similarities in their age, their passion for politics and their talent for hatchet-burying. Unstated is the fact that neither has a choice.

Clinton has no intention of doing anything to alienate American Jewish voters this year; Netanyahu needs to burnish his image as a statesman.

``American politicians and Israeli politicians are realists,'' said Zalman Shoval, a former Israeli ambassador to Washington who is likely to return to the post in a Netanyahu government, by telephone from Israel. ``They understand that yesterday was yesterday and what counts is today and tomorrow.''

Indeed, administration officials described Clinton as resigned but upbeat when he called Netanyahu to congratulate him on his victory on May 31 and to invite him to come to the White House.

``You ran a great campaign,'' he told him.

And in an extraordinarily conciliatory gesture, Clinton appeared to offer to meet the new Israeli leader more than half-way. Reminding Netanyahu of something he had told him before the 1992 presidential election, he said, according to his aides: ``The United States can't make Israel's policies, but the United States can support Israel in its own search for peace.''

Netanyahu assured Clinton that U.S.-Israeli relations were ``as solid as a rock and will continue'' and accepted the invitation to visit as soon as he had selected a cabinet, probably later this month.

``We'll be able to work together,'' he assured Clinton.

In a phone conversation with Netanyahu on Monday, Ross offered to ``brief'' him at his convenience on the state of all the negotiations. The message he got back was, `` `OK, but not now,' '' according to members of Netanyahu's inner circle.

An Israeli official familiar with the conversation said that Ross essentially was told that, ``Before a new government is formed, before our policy interests are formulated,'' such a meeting would be ``premature.'' American officials said they did not interpret the exchange as a snub.

Whether the old Netanyahu - the one banned from the State Department after he accused the United States of building its policy toward Israel ``on a foundation of distortion and lies'' - will surface again is hard to predict.

That outburst was too much for Baker. ``His language was unacceptable for a senior diplomat from a friendly country,'' Baker recalled in his memoirs. Netanyahu claimed in a letter to Baker to have been misunderstood, and the ban was lifted. But Baker never again would meet him in the State Department.

``It behooves everyone to start over,'' said Richard Haass, the chief Middle East specialist during the Bush administration. ``There is no value to beginning where we were five years ago.''

So how does someone like Ross deal with Netanyahu?

``Anyone who made the transition from Bush to Clinton should be able to make the transition from Peres to Netanyahu,'' Haass said.

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Photo: Benjamin Netanyahu

Felt snubbed by U.S.