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JERUSALEM — Far from stirring up the current wave of ethnic tensions in Israel, Shas Party leader Aryeh Deri is trying his best to restrain it.

Or that was his message when he spoke to a group of Young Labor activists Sunday. But there are those who find it difficult to believe Deri.

While no individual Cabinet ministers or coalition partners, including Shas, left the government after the attorney general issued his report last week on the Bar-On affair, questions remain about what Shas, which holds a critical 10 seats in the Knesset, may do.

The attorney general's decision to prosecute Deri alone has sent a surge of renewed ethnic resentment — long dormant, but never dead — among supporters of the ultra-religious Shas Party and beyond.

Shas draws much of its support from religious Jews of Sephardi background. The resentments, which extend to non-Orthodox Sephardi as well, stem from a feeling that an anti-Sephardi bias led to Deri's indictment.

Whether Shas will stir the resentment for political gain is one of the big questions that remains in the wake of the political scandal that has rocked Israel for months.

Deri met with the Labor activists, at their request, for an urgent dialogue on the state of Israeli society in the aftermath of the attorney general's announcement.

Attorney General Elyakim Rubinstein, together with State Prosecutor Edna Arbel, held that contrary to police recommendations, there was insufficient evidence to bring charges against Prime Minister Benjamin Netanyahu and Justice Minister Tzachi Hanegbi.

Deri is to be charged with breach of trust, extortion and obstruction of justice in connection with allegations that the short-lived January appointment of Roni Bar-On as attorney general had been part of a deal to give the Shas leader a plea bargain in an ongoing corruption case.

But the state's two top legal officers wrote in a lengthy report that a heavy cloud of suspicion still hangs over the prime minister's behavior in the affair, and that the justice minister had violated acceptable norms of ministerial conduct in his actions.

At an April 23 mass rally in Jerusalem, speakers, led by party mentor Rabbi Ovadia Yosef, challenged not only Rubinstein's findings, but the entire legal establishment.

"We do not believe in it," declared Rabbi David Yosef, son of the party's spiritual adviser.

Deri's description Sunday to the Young Laborites of his efforts to cool inflamed emotions dovetailed with a report in the Israeli daily newspaper Yediot Achronot that some of the demonstrators last week wanted to march on the Supreme Court building near the Hebrew University stadium where they rallied — and that it was Deri who helped prevent the march.

But many of the Young Labor activists — as well as many in the general public — are skeptical about Deri's protestations in light of his own speech at last week's rally.

"They aren't persecuting us for political reasons," he told the crowd of some 20,000. "They're persecuting us for ethnic and religious reasons.

"They are afraid that the `Shasnikim' are going to spread and multiply until they change the face of this country," he said, adding, "Secular Zionism has failed."

Underlying his speech was the presumption that the attorney general's decision was a manifestation of the "persecution" by the Ashkenazi legal elite of the rising political power of Orthodox Sephardim, personified by Deri.

Rubinstein, who is an Orthodox Ashkenazi, responded with a rare and emotional statement in which he termed these accusations libelous.

In subsequent briefings, he insisted that Deri could not be exonerated in the Bar-On affair, given the damning evidence provided by his former attorney, Dan Avi-Yitzhak.

Avi-Yitzhak told police interrogators that Deri had repeatedly assured him that he had a recorded promise from Bar-On to help him reach a plea bargain in the criminal proceedings against him, and that he had a promise from Netanyahu to appoint Bar-On as attorney general.

Bar-On won Cabinet approval Jan. 10, but stepped down two days later amid growing charges in political and legal spheres that he lacked the experience to hold Israel's top legal post.

Rubinstein, approved by the Cabinet to become attorney general two weeks later, made it clear in his public appearances over the weekend that he is looking to the broader political community to counter Shas' accusations against him and his report.

In that community, however, this latest, unexpected twist in the Bar-On affair is eliciting mixed reactions.

Shas Knesset members are circulating a petition among all 120 parliamentarians, demanding that Rubinstein reconsider and reverse his decision to prosecute Deri alone.

They claim they have had warm responses from across the political spectrum.

Among the politicians publicly opposing the attorney general's decision have been Foreign Minister David Levy of Likud and former Interior Minister Haim Ramon of Labor.

Levy, like Deri, relies on his fellow Moroccan immigrants for his grassroots support. For his part, Ramon has long been a personal friend of the Shas leader.

Other politicians have challenged the alleged "discrimination" in the attorney general's report, saying they want Netanyahu and Hanegbi indicted along with Deri.

"How can there have been an extortioner," asked opposition leader Shimon Peres, referring to Deri, "without a victim of extortion?" meaning Netanyahu.

Meanwhile, the State Attorney's Office said it plans to represent Netanyahu and Hanegbi in a series of petitions to the High Court of Justice on the Bar-On affair.

"The State Attorney's Office stands by its decision — that there is no evidence to prosecute the ministers — and therefore will defend them in court," a source said Tuesday night.

Opposition members have appealed to the High Court of Justice to overturn the attorney general's decision not to follow the police recommendation to indict Netanyahu as well as Deri.

On the other hand, Likud Minister of Communications Limor Livnat spoke out sharply over the weekend against the petition, as did Likud hard-line Knesset member Reuven Rivlin.

Livnat called opposition demands for a state commission of inquiry another attempt to bring down the government, and a challenge to the judicial branch of the government.

Opposition members this week called for a state commission of inquiry to investigate the ethical and moral ramifications of the affair. But the Knesset, called back for a special session during its Passover recess, defeated such motions by Labor and Meretz.

Despite speculation that Justice Minister Tzachi Hanegbi might be replaced in the wake of the attorney general's report, Netanyahu made clear this week that he had no plans for any Cabinet "reshuffle."

"There is much more important work to be done," he told CNN.

Netanyahu, clearly aware of the possible political complexities in this issue, spoke Sunday of a sense among the public that the attorney general's recommendations had been awkward. Netanyahu said he would consider whether to sign the petition for Deri "when it reaches my table."

Presumably, Netanyahu will be watching how Peres and Ehud Barak, the leading challenger for the Labor leadership, react to the Shas demand.

Netanyahu was also certain to be watching how public emotions shape up in the coming days among the Sephardi population.

By coincidence, Monday night and Tuesday marked the annual nationwide celebration by the Israeli-Moroccan community of its post-Passover holiday, the Maimouna.

Leading politicians across the spectrum always make a point of attending the various mass celebration sites around the country — and they were all expected to do so this year — anxious to demonstrate their solidarity with this community amid heightened tensions.

Shas spokesmen, meanwhile, have denied that their party is planning to force early elections to take advantage of those tensions.

With its 10 seats, Shas has the power to bring down the government if it decides to bolt the coalition, a move that would bring new elections for prime minister and Knesset.

Some political observers are closely watching to see whether Deri, together with others in the Shas leadership, decide that the current welling-up of ethnic tensions can only boost its prospects in new Knesset elections.

For years now, Shas leaders have cited the biblical verse about the Jewish slaves in Egypt — "As they persecuted them, so they grew and so they multiplied" — as applicable to their own party.

Politicians across the spectrum are warily contemplating the prospect of Sephardi voters coming to the polls angry and resentful at what they see as Deri's victimization.

Whom would they punish? Few in Israeli politics want to run the risk of finding out.