WHEN Kol-Israel radio beamed the news, it looked like an Israeli dream-come-true. The Gulf war was over, Kuwait was liberated, and Iraq's army was crushed. After six frightening weeks of Scud alerts, Israelis could tear down the masking tape in their closed sealed rooms and stop walking around with their gas masks. But no one here seemed to rejoice.
Instead of producing an outpouring of optimism, a 10-day stay here leaves a visitor feeling that prospects for an Arab-Israeli peace look worse than ever. Laser-guided bombs could crush Saddam Hussein's army, removing a military threat to the Jewish state, but they cannot destroy deepening hatred on both sides.
If anything, the Gulf war has destroyed a fragile middle ground between Israelis and Palestinians. Not all Palestinians stood on their roof tops cheering on the Iraqi Scuds. Most spend the war in their houses under curfew and some I talked to were just as scared of being gassed as their Jewish neighbors. But enough supported Saddam to throw the Israeli peace movement into disarray and permit right-wing Prime Minister Yitzhak Shamir to jail leading Palestinian moderates, step up the building of Jewish se ttlements in the occupied territories, and hand a cabinet position to a party advocating the expulsion of the Arabs from the territories - all with little domestic opposition.
"This isn't the end of the war for us," Israeli hosts repeated over and over. "It's just the beginning of a new war." The most optimistic Israelis insisted, "at best we're back to the normal - and normal here is not really normal."
The war's physical damage in Israel was relatively small. Visiting Ramat Gan just outside of Tel Aviv where the most destructive Scuds hit, I expected to find entire neighborhoods destroyed. Only a few apartment buildings were missing. Around them, buildings stood intact.
The psychological wounds are much greater than the physical ones, and they will not go away. Living with the threat of being gassed is frightening enough for anyone; it is traumatic for a people decimated by gas by the Nazis.
Israelis are proud of shaking off the image of the passive "ghetto" Jew, who stood by and quietly absorbed the terrible violence of anti-Semitism. But the same Israeli was forced to fight the last war by rushing to his sealed room with a gas mask.
"You come and see that the damage is small, but the damage up here is great," says Yehoshua Rash, an official in the Jewish Agency, pointing to his head. "We live in Ramat Gan and until now, we thought we were far from the front lines."
Just as troubling, for the same reason, was the impression that Israel was depending on foreigners to take care of its security.
"We're used to taking everything into our own hands," says Edith Zeitan, a historian at the University of Tel Aviv. "What's hardest for us is to sit back and just take the blows."
Military and political experts worry that Israel has lost its deterrence. Over and over again, Israeli leaders warned Saddam Hussein that any attack would provoke a strong, violent response. But when the Scuds fell, Israel did nothing. Some Israelis fear that this restraint, while securing relations with the United States, will encourage the Arabs to attack the Jewish state.
American pressure, building on the unprecedented prestige and leverage of the Gulf victory, might be able to overcome these Israeli fears. Polls show that not only do Israelis realize they need American military deterrence, but also American financial assistance to absorb the flow of Soviet immigrants.
But on the ground, any optimism quickly vanishes. Some Palestinians I talked to criticize Yasser Arafat for supporting Iraq, but they admit they would never challenge him in public. Some Israelis I talked to admitted that the need for a Palestinian state is greater than ever, but they added that they wouldn't say that on Israeli television.
The conflict's brutality takes an ever-increasing toll. Before the intifada and before the Gulf war, visitors could travel around the occupied territories with few fears. But now Israelis warned against even venturing into the souk, or market, in the Muslim quarter of Jerusalem's Old City.
I went anyhow. The tension was palpable. No Israeli Jews were visible, and there were no other foreign visitors. Shopkeepers stared angrily at my Western clothing and Palestinian shoppers kept their distance. I left as soon as possible. It was a wise move. A few days later, in the souk, a yeshiva student was stabbed to death.