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JERUSALEM — Prime Minister Benjamin Netanyahu is fighting for his political life as a police inquiry into the short-lived appointment of an attorney general reaches its apex.

Netanyahu seems prepared to sacrifice political supporters and aides in his bid to stay afloat. An ominous gap appeared to open this week between him and a longtime ally, Justice Minister Tzachi Hanegbi.

Political observers, meanwhile, pondered the government's future even if Netanyahu were to escape criminal charges stemming from the police investigation into the appointment last month of Ronni Bar-On as attorney general.

Some feel the moral and ethical aspects of the affair could yet bring the Netanyahu government down. Others maintain the prime minister will tough it out.

The investigation centers on the Cabinet's Jan. 10 appointment of Bar-On, a relatively unknown Jerusalem lawyer and veteran Likud activist, to replace Michael Ben-Yair, who had resigned in December.

Bar-On's tenure lasted 48 hours. He resigned Jan. 12 amid widespread criticism that he lacked the professional and personal qualifications to be Israel's top law-enforcement official.

Two weeks later, the Cabinet unanimously approved District Judge Elyakim Rubinstein as Israel's attorney general.

The Bar-On appointment blossomed into a full-fledged scandal after state-owned Channel 1 Television shook the nation with a report that Bar-On was picked as part of a deal to provide a plea-bargain to one of Netanyahu's political allies, Knesset member Aryeh Deri of the ultrareligious Shas Party, who is on trial for corruption.

In turn, Deri allegedly had promised his party's much-needed support for the Hebron agreement, which was coming up for Cabinet approval at the time, the television report said.

Everyone reportedly involved in what came to be called the "Bar-On for Hebron" deal denied the allegations.

But Deri has admitted he was involved in promoting Bar-On's appointment and in thwarting Netanyahu's preferred choice, Dan Avi-Yitzhak, who was Deri's defense attorney.

Another political activist on trial for fraud, building contractor David Appel, also has admitted that he played a key role in getting Bar-On nominated.

Since the television report, Avi-Yitzhak has become a key figure in the drama. Last week, he quit as Deri's attorney, publicly accusing the Shas leader of "planning" Bar-On's appointment. In the process, Avi-Yitzhak gave substance to at least part of the report.

Among the latest shocks was a report that when Netanyahu was interrogated by police investigators probing the affair last week, senior police detectives formally advised him of his rights — a procedure followed when the person under questioning is formally suspected of having committed a crime.

Within days after the police interview, Netanyahu hired top criminal lawyer Ya'acov Weinroth to represent him.

Monday, police interviewed the president of the Supreme Court, Aharon Barak, seeking to establish what precisely he had said to Hanegbi when the justice minister told him that he was planning to nominate Bar-On as attorney general.

Netanyahu and Hanegbi seemed widely at odds as to what Barak said, what Hanegbi understood, what Hanegbi told the prime minister, and what was subsequently related to the Cabinet.

Weinroth seemed deliberately to deepen the divide Monday by suggesting publicly that Hanegbi, too, should get a lawyer.

The justice minister retorted that he did not need one and that he is confident that his own testimony to the police will stand him in good stead. "I cannot disclose its substance," he told reporters. "But I stand behind every word of it."

The two tried to put the best face on any tension between them, with Netanyahu saying Tuesday he had full confidence in Hanegbi.

"I value him and we work together fully," he said. "When the time comes I'll have something to say about the affair a lot."

If the premier is charged, it could be for breach of trust by a public servant. Hanegbi could face additional charges of misrepresentation relating to his reporting of Barak's opinion of the Bar-On appointment.

And both, along with other officials, could conceivably face a conspiracy count — if the police establish that Bar-On's nomination was indeed intended to confer legal benefits on someone facing trial, and if the State Prosecutor's Office resolves that that is indeed a criminal offense.

Also this week, police raided Bar-On's office and seized documents connected to the investigation, Channel 1 reported. Bar-On said the documents were unrelated to the affair.

Another figure under investigation is Netanyahu's closest aide, Avigdor Lieberman, director-general of the Prime Minister's Office. Many political observers say Lieberman, with Hanegbi under him, wields tremendous clout in the operation of Netanyahu's government. Lieberman, a Soviet immigrant, has called the Bar-On probe "racist" because of his background.

Police were scheduled to continue questioning Lieberman by midweek.

State Prosecutor Edna Arbel said Sunday she hoped the inquiry would end within a week or two. Still, Weinroth said Monday there was "no chance" Netanyahu would face criminal charges.

Within Netanyahu's Likud Party there was a dutiful closing of ranks this week around the beleaguered prime minister.

Likud officials counterattacked on his behalf, accusing the opposition of exploiting the situation for crude political gain even while the police inquiry was still under way.

In the broader governing coalition, too, there were public expressions of solidarity with Netanyahu, condemnations of the opposition and of media leaks, and calls on the public to show patience pending the inquiry's conclusion.

But none of Netanyahu's Cabinet colleagues issued a statement expressing an unreserved belief in the prime minister's integrity.

Several ministers, on the other hand, seemed to make a point of telling reporters they would resign if the premier were tainted by the inquiry.

Behind the public facade of solidarity, there were expressions inside the Likud this week of profound dismay in Netanyahu.

Dissent within the Likud was exacerbated by a scathing interview in the weekend edition of the daily newspaper Ma'ariv by former Prime Minister Yitzhak Shamir, who accused Netanyahu of betraying the party's principles in his peace policy.

Shamir made it clear he regrets the party's choice of Netanyahu as his successor, though he did not suggest specifically who would better fit the bill.

In the Labor Party, meanwhile, a spat broke out this week between Secretary-General Nissim Zvilli, who called on the party faithful to "prepare for early elections," and the frontrunner for the party's leadership position, Ehud Barak.

While the Bar-On affair was "terrifying even if it is only half-true," Barak said, Labor would be best advised to keep silent while the legal process takes its course.

Behind the scenes in Labor, there are fears among Barak's many followers that Netanyahu, in distress, might turn to former Prime Minister Shimon Peres and offer him a government of national unity — and that Peres might agree.

Barak has consistently opposed the unity scenario, and is even more determined now to prevent it.

Another possibility troubling the Barak camp is that if Netanyahu falls and early elections are declared, Peres may run again for the Labor leadership.

Some Laborites note that Peres has pledged not to stand for premier in the year 2000, when the next elections would normally be held. But that might leave the way open, at least in Peres' own book, to his running again in 1997.

The Barak supporters believe only he could defeat an attractive Likud candidate.

Netanyahu, meanwhile, urged Labor aspirants "not to sew your suits so quickly."

He says he intends to be prime minister for his full four years, "and then for four more after that."