THE current struggle over loan guarantees for Israel is not just an issue between the United States and the Jewish state. It is one more classic episode in the long-running battle between the executive branch and the legislative branch over who makes foreign policy. A difficult diplomatic issue becomes at the same time a US domestic matter because of the extraordinary influence of the friends of Israel in the Senate and the House.As have his predecessors, President Bush strongly believes he has the responsibility to conduct US foreign policy. In the current case, his determination to do so is clearly reinforced by his conviction that he is within sight of a remarkable advance toward Middle East peace. The president recognizes the right of Congress to review policy and he understands the concerns of Israel. Nevertheless, he and those around him are convinced, from their extensive conversations with all parties, that they alone possess the broad perspectives and information required for policy decisions in this matter. Israeli Prime Minister Yitzhak Shamir is guided by his view of his country's interests as well as by a recognition of the fragile nature of his governing coalition. But part of his calculation - at the beginning, at least - was almost certainly that he could fend off administration opposition to his policies through the pressures on Congress by Israel's supporters. History provides him with many precedents. Past US administrations have often drawn back from efforts to limit or place conditions on aid to Israel to avoid a bruising and probably unsuccessful battle with the Congress. Members of Congress have strongly supported economic and military aid initiatives for Israel, often adding to administration requests. Israeli representatives have at times spoken openly to US officials of their ability to "deliver the Congress." In some cases, presidents have been able to overcome congressional opposition to military sales and aid to Arab countries deemed in the US national interest, but only after a prolonged legislative battle. Such cases, however, did not relate so directly to internal policies of the Israeli government as does the present controversy. Senators and representatives who support Israel will insist that they are not doing so at the behest of a foreign government. It is true that the American Israel Public Affairs Committee, the principal pro-Israeli lobby, has no financial links with the Israeli government and is not registered as the agency of a foreign government. Although its messages and efforts will often parallel the interests of the government in power in Israel, its base is among American citizens. These supporters, both Jewish and non-Jewish, believe the US tie with the Jewish state to be important because of the common heritage of democracy, the need for a homeland for the Jewish people (particularly emigres from the Soviet Union), and the link with the Holy Land tradition. Their strong attachment to their state and their fear of exhibiting divisions within the community means virtually solid support for the policies of the Israeli government, whatever they may be. Those who support the pressures on Congress believe they have a right as citizens to utilize the political system to gain the maximum support in the US for the security and economy of the Jewish state. And they have done so with great effectiveness. Through financial contributions to congressional campaigns and through their demonstrated ability to finance the defeat of members of the House and Senate considered unfriendly to Israel, friends of the Jewish state have established an unparalleled influence in the national legislature. The supporters of no other country exercise such influence. The present confrontation, therefore, poses problems for each of the three parties in the US domestic debate. The president's hand will be weakened if he is seen in the Arab Middle East to yield to pressures in the Congress. The supporters of Israel cannot be comfortable, caught as they are between the broad public support for the president's policies and their sympathy with Israel. And if members of Congress insist on a bruising debate on the loan guarantee and settlement issue at the very moment when t he president and the secretary of state may be making progress toward peace in the Middle East, they cannot escape a share of blame for any failure of the president's peace initiative. The American constitutional system has always contained the seeds of such a struggle between advocates of a policy who find supporters in the Congress and the president. But times come when the president must be given the support he needs. This would appear to be such a time.