NETANYAHU MAKING POLICY HIS WAY : CHASM BETWEEN PRIME MINISTER, FOREIGN MINISTRY WIDENS.

Byline: Neil MacFarquhar The New York Times

Sweeping through the grounds of King Hussein's palace in Amman, Jordan, Prime Minister Benjamin Netanyahu of Israel was accompanied by a retinue of about 25 senior aides and Israeli businessmen that was remarkable for one glaring omission. Not a single representative of the Israeli Foreign Ministry was present, aside from the departing ambassador.

The slight helped provoke a public mudslinging festival between the prime minister's office and the Foreign Ministry, something of a tradition in Israel. More important, it underscored how Netanyahu retains unprecedented control over government policy even by Israeli standards, formulating plans within a small group of aides known more for their loyalty than for their experience.

``The old joke here is that the prime minister's office made foreign policy and the foreign minister carried it out, but that is not even true in this case,'' said Joseph Alpher, head of the Israel/Middle East office of the American Jewish Committee. ``It is a striking characteristic of Netanyahu's staff that they are by and large people who have no significant policy experience, but they are completely loyal to him and to the kind of highly centralized operation he favors.''

Old hands at the Foreign Ministry have been grumbling in the press and in private that the peace talks are languishing while Netanyahu is busy modeling his administration on the American presidency. Foreign policy experts complain that he is relying heavily on a circle of mostly thirtysomething Likud Party loyalists, some recognized for writing in English rather than Hebrew.

Likud loyalists admit that Netanyahu, aside from his longstanding personal animosity toward Foreign Minister David Levy, mistrusts the ability of the ministry to relinquish the vision of its former boss, the Labor leader Shimon Peres.

``The prime minister believes that the professionals in the Foreign Office are very much to the left and agree with the policies of the previous government,'' said a Likud member of Parliament. Most members of the Likud coalition, not wanting to get caught up in the fight between the prime minister and the foreign minister, either declined to comment or spoke on condition of anonymity.

In a vain attempt to quiet the complaints, Netanyahu went on television recently to remind everyone that he was the first Israeli prime minister to be chosen by direct election. ``I was elected in personal elections in order to promote a certain policy, and the heart of the policy is the Palestinian issue,'' he said. ``I mean to control it in partnership with the foreign minister, but I mean to lead. There is only one prime minister.''

Levy's camp responded with rumblings about his leaving the government. Before the May elections, Netanyahu and Levy, his longtime, unsuccessful rival to head the Likud Party, forged a marriage of convenience in order to unseat the Labor government.

``In Israel, foreign ministers are not appointed because of their qualifications but because of their political leverage,'' said Shlomo Ben-Ami, a Labor member of Parliament and former ambassador to Spain, noting that Levy got his post in a political quid pro quo. ``They acknowledge his political power, but did not respect his qualifications.''

Levy has a strong power base among Jews of Middle Eastern, especially Moroccan, origin. There is a social gap with Jews of Eastern European descent, which in the Likud takes the form of grumbling that a man who does not speak English, like the French-speaking Levy, should not be foreign minister. But if Levy pulled his five Parliament members out of the governing coalition he might be able to force Netanyahu into a tortuous attempt to form a new government.

The recent tiff flared over negotiations with the Palestinians. As the only member of Netanyahu's Cabinet ever to have met with the Palestinian leader Yasser Arafat, Levy sought to be overall coordinator of the many strands of the talks, a position Netanyahu planned to fill with one of his own aides.

There was also the matter of the way the Foreign Ministry was being treated. Besides leaving its experts at home during his regional trips, diplomats said the prime minister's office did not provide transcripts of telephone conversations with foreign leaders and that Netanyahu's foreign policy adviser, Dore Gold, had been dispatched to Washington for talks with Secretary of State Warren Christopher without having informed the Israeli Embassy.

The animosity between Levy and Netanyahu is personal as well as professional. In the bitter fight over the Likud leadership in early 1993, Netanyahu strongly suggested that Levy planted the story of a salacious videotape that led Netanyahu to confess to adultery on television.

Their differences seem to stem more from questions of prestige than of policy.

``It is unthinkable that the crucial issues of foreign policy wouldn't be done by the foreign minister with the right qualifications,'' said Michael Kleiner, a member of Parliament from Levy's Party.

Although Levy can be hawkish when he wants to, he has a reputation for being more flexible than other members of Likud. He spoke out against the 1982 Israeli invasion of Lebanon. Working with Secretary of State James Baker III, Levy agreed to Israeli participation in the 1991 peace conference in Madrid despite the objections of his boss, Prime Minister Yitzhak Shamir. Israeli politicians said Netanyahu wanted to avoid such independent maneuvering.

Such wrangling is not limited to Likud. When Labor took power after Madrid, Prime Minister Yitzhak Rabin tried to relegate Foreign Minister Peres to the sidelines by giving him the multilateral talks on issues like water and economic development. ``Rabin despised the multilateral talks, and he used to joke about it, asking if Peres had created a regional bank yet,'' said Ben-Ami. Instead Peres used the mandate to maneuver Israel into the direct negotiations with the Palestinians that gave birth to the current agreement.

Political analysts said that in the sparring with Netanyahu, Levy had not been going to his office in the Foreign Ministry, thus further pushing actions on foreign affairs into the hands of the prime minister's advisers, including Gold; Danny Naveh, Netanyahu's Cabinet secretary; and Avigdor Lieberman, the director-general of the prime minister's office.

Right after the election, Netanyahu also heralded the formation of a National Security Council, but foreign policy experts said that Netanyahu, or Bibi, as he is widely known, had trouble recruiting because of his reputation for making his own decisions.

``Bibi is a National Security Council of one with a personal staff,'' said Mark Heller, a senior research associate at the Jaffee Center for Strategic Studies of Tel Aviv University.

Criticism of his staff has centered on members' lack of previous experience in policy positions, not to mention several key members having grown up outside Israel.

Gold, 42, was reared in Connecticut and holds a doctorate in political science from Columbia University. He immigrated to Israel in 1980 and specialized in United States-Middle Eastern relations at the Jaffee Center. He has expressed his opinions in The Jerusalem Post, an English-language newspaper, rather than in the mainstream Hebrew press.

Lieberman, 37, moved to Israel from the Soviet Union in 1978, graduated from Hebrew University with a political science degree and has been director-general of Likud for the past three years. Naveh, 36, Netanyahu's Cabinet secretary, was previously the spokesman for Moshe Arens, Netanyahu's mentor, in the Defense Ministry as well as for Netanyahu.

Because they all owe their positions to Netanyahu, foreign policy experts said none would forge independent goals in peace talks. Netanyahu is expected to follow through with his predecessor's commitment to redeploy Israeli troops from around Hebron - with the long delayed plans that could be announced as early as this week likely to emphasize continued Israeli access to protect Jewish settlers.

The real test of his foreign policy will come when he starts negotiating with the Palestinians, which he has avoided so far. Aside from highly sensitive issues like Jerusalem, the next round should decide issues like how much of the 70 percent of the West Bank that Israel still controls will eventually come under Palestinian sovereignty.

The Netanyahu Cabinet has altered the rules already by loosening restrictions on expanding the settlements. Arafat has warned of renewed clashes if expansion is carried out.

``The real question is Bibi himself,'' Heller said. ``All that we know about him so far is that there is not much room for significant movement beyond implementation of what has already been agreed upon between Israel and the Palestinians.''