IRAQ'S invasion of Kuwait is viewed here as a significant diplomatic windfall for Israel which will help smooth this week's visit to Washington by Foreign Minister David Levy. Israeli officials and analysts agree that the demonstration of the Iraqi threat in the Persian Gulf and the preoccupation of the United States with that oil-rich area are bound to reduce US pressure on Israel to begin talks with the Palestinians.
Instead, the focus of Thursday's slated meeting between Levy and US Secretary of State James Baker III is expected to shift to possible US-Israeli cooperation in confronting Iraq, which has emerged as a far greater immediate threat than the Israeli-Palestinian dispute and the intifadah or uprising.
Israel's role as a stable, strategic ally of the US will be enhanced, and the timing and atmosphere will not be right for exerting pressure on Prime Minister Yitzhak Shamir's government, observers say.
``The problem now is not Israel's answers to Secretary of State Baker regarding a dialogue with the Palestinians, but the American answer to Iraq,'' says Zvi Rafiah, an analyst of US-Israeli relations.
Mr. Levy said that the Iraqi invasion had shown Israel ``more than ever not only as an ally of the US, but as a strategic asset for real stability in the Middle East.'' Defense Minister Moshe Arens, who returned recently from a visit to Washington, said his warnings of increasing dangers of war had been vindicated.
The Iraqi invasion has also boosted Mr. Shamir's attempts to shift the diplomatic emphasis of the Middle East peace process from the Palestinian issue to Israel's conflict with the Arab states.
Interviewed on Israel television over the weekend, Shamir said: ``The [Iraqi] attack has revealed to the world the dangers and threats faced by Israel. It proves that the emphasis we have put on relations between us and the Arab states is the main component of the problem of peace between us and the Arab world.
``The whole issue of the conflict with the Palestinians is dwarfed by the terrible dangers which have now come to light.''
Defense officials say threats against Israel by Iraqi President Saddam Hussein should be taken seriously, but there is no expectation here of an imminent Iraqi strike westward. President Hussein's capture of Kuwait is seen as a direct product of political and economic developments in the Gulf, to which Israel is not directly related.
It is also widely believed that Israel has a deterrent capability sufficient to avert an Iraqi attack.
Mr. Arens warned over the weekend that if Iraqi troop enter Jordan, Israel would respond, and the Israeli Army has begun preparing to distribute gas masks to Israelis against a possible chemical weapons attack.
Among Palestinians in the Israeli-occupied territories there was support in the streets for the Iraqi invasion, popularly described as a bold stroke by a nationalist leader, a blow against a wealthy and corrupt US ally that had shaken up the debilitating status quo in the Middle East.
But more sober Palestinian spokesmen cautioned that the Iraqi invasion would work to their disadvantage, postponing any substantial discussion of their problem.
``We are going to be the losers,'' says Bethlehem Mayor Elias Freij. ``There is no peace process now, Levy and Baker will deal with other matters and the plight of our people will deepen.''