WASHINGTON — Fearing increased Palestinian terrorism, Israel has dropped its request to extradite jailed Hamas leader Mousa Mohammed Abu Marzook from the United States.

The decision to drop the extradition request, made by Israeli Prime Minister Benjamin Netanyahu in consultation with his security chiefs, cleared the way for the United States to deport the man regarded as Hamas' foreign minister.

The Israeli announcement comes as a deal is apparently being worked out to send Marzook to Jordan.

In an interview from a New York prison, Marzook told the Reuters wire service, "My understanding is that everything is done" to go to Jordan.

Formally, Israel only suspended its 18-month quest to bring Marzook to an Israeli courtroom to stand trial for directing Hamas operations. But U.S. officials said the move effectively ends the chances that Marzook would face the Israeli justice system.

Marzook's fate now rests with the U.S. government, which arrested him at New York's Kennedy Airport in 1995. The arrest came after he was placed on the U.S. "watch list" of probable terrorists.

Israel and the United States claim that there is sufficient evidence to prosecute Marzook for orchestrating suicide bombings.

Marzook has denied any connection to Hamas' military wing. He maintains that he was only involved with fund-raising and organizing the political and social side of Hamas.

The Immigration and Naturalization Service moved quickly last week to reopen its case against Marzook, a legal immigrant who lived in the Washington, D.C., suburbs prior to his arrest.

But if a deal is worked out with Jordan, the INS proceedings would be a formality.

Marzook would agree to be sent to Jordan under certain conditions that the State Department would impose.

Marzook painted Netanyahu into a corner with his surprise announcement in January that he would no longer fight extradition to Israel.

Apparently feeling that his case was losing visibility, Marzook decided that he would rather face his accusers in an Israeli courtroom than wait out the fight against extradition, which could have dragged on for years.

Now, he says of the Israelis, "I knew they would never extradite me," Reuters reported.

Announcing the decision Thursday of last week in Jerusalem, Netanyahu spokesman Shai Bazak told reporters: "The decision was taken on the basis of overall considerations concerning security and the prevention of terrorist attacks."

If the Israeli premier had brought Marzook to stand trial in Israel, security advisers warned, the move would likely have further inflamed Palestinian passions. As it is, Palestinian violence has intensified in recent weeks.

Hamas had warned of a terror campaign aimed at Israel and the United States if Marzook was deported.

But now Netanyahu has opened himself to criticism that by passing on the opportunity to bring a Hamas leader to justice, he looks weak in the war on terrorism and undermines demands that Palestinian Authority leader Yasser Arafat crack down on Hamas in areas under his control.

Fears among legal authorities that prosecutors could lose the case at a trial also factored into Netanyahu's decision, officials said.

Reaction to the Israeli decision was subdued.

"Unfortunately I think that Israel has subjected itself to more terrorist attacks," said Steven Emerson, an investigative journalist who has written extensively on Middle Eastern terrorism.

By deciding to drop its extradition request, he said, Israel has sent a message "that Hamas can basically blackmail Israel."

Officials with Jewish groups expressed similar frustration in private, but publicly stood behind Netanyahu's decision and called on the U.S. government to find another way to keep Marzook in custody.

"It would be regrettable if anything were done to allow this guy to walk," said Malcolm Hoenlein, executive vice chairman of the Conference of Presidents of Major American Jewish Organizations.