Former Secretary of State George P. Shultz said Israel shouldn't "crawl around to Damascus" to negotiate peace in Lebanon, but has "got to be tough" with Syrian president Hafez Assad.

"I've met him," Shultz said of Assad. "He's bright, smart, totally murderous. But he's there" in power, and Israel should be "laying down markers" to pressure Syria into reining in Hezbollah.

Shultz's tough talk about Syria hit home at an otherwise lighthearted luncheon honoring this year's Koret Israel Prize winners at the Ritz-Carlton San Francisco. Shultz was there to accept the Koret Prize for Contribution to Economic Reform and Development in Israel.

When Shultz spoke, people listened. Forks ceased poking into fillets of sea bass and wineglasses stopped in midair. The din of luncheon shmoozing fell silent.

Shultz recalled the funeral of slain Israeli Prime Minister Yitzhak Rabin, which drew leaders from 84 nations, but which Assad did not attend. Shultz believes that "moving" memorial to Rabin may be partly behind Syria's failure to rein in the radical Hezbollah.

"Mr. Assad is feeling isolated and striking back," he said.

Two other Koret Prizes were awarded at the ceremony Wednesday of last week. Also, six Koret Israel Fellows were named: As part of the prize, they will visit the Jewish state together on an educational mission. The prizes and fellowships are given for outstanding professional achievements and leadership or potential leadership in the Jewish community.

Shultz took the opportunity not only to remember Rabin, but to encourage the development of a free market economy in Israel — long a mission of the S.F.-based Koret Foundation, which sponsors the awards along with the S.F.-based Jewish Community Federation.

A bust of Shultz, now a Hoover Institution Fellow and Stanford University professor, will be placed at the Mount Scopus campus of Hebrew University in honor of the award.

Earl Raab, nationally known Jewish scholar and Jewish Bulletin columnist, collected the Koret Prize for Exemplary Contribution to the Jewish community. Tad Taube, president of the Koret Foundation, presented Raab with a set of oil lamps from the Byzantine era. "Antiques for the antique," joked Raab, 77, who has worked in the Jewish community for half a century.

Fellowships were awarded to author Ethan Canin; Janette Gitler, KRON director of local programming; Robert C. Post, professor at Boalt Hall College of the Law; Dean Ornish, physician and author; John G. Adler, chairman of Adaptec, a Milpitas computer parts manufacturer; and Aaron Betsky, San Francisco Museum of Modern Art curator of architecture .

Past winners include American Conservatory Theater's Carey Perloff (1994), artist Stanley Saitowitz (1991), football player Harris Barton of the 49ers (1992) and developer I. Donald Terner (1990). Terner, who died in a plane crash last month with Commerce Secretary Ron Brown, was remembered at the luncheon.

Corner offices at Jewish agencies were emptied for the afternoon as leaders from almost every community organization and board came to the Ritz-Carlton. Attendees included Anita Friedman, executive director of the S.F.-based Jewish Family and Children's Services; Nimrod Barkan, Israeli Consul General for the Pacific Northwest; and Alan Rothenberg, incoming president of the JCF.

Mayor Willie Brown did not attend but sent a letter of congratulations to the winners.

Each year, a Koret Leadership Prize goes to the previously awarded Koret Fellow who returns from Israel and "most notably fulfills Jewish leadership potential." This time, the award went to high-tech investor James A. Katzman, now on the board of the Jewish Studies program at Stanford University.

Koret Israel Fellowship selection committee member Ron Berman wished the winners good luck on their 10-day trip to Israel and remarked to the audience, "We're like Hallmark. We care enough to send the very best."