JERUSALEM — As governments around the world scrambled to respond to India's nuclear tests last week, Israel faced its own anxiety — renewed fear of an "Islamic bomb."

In particular, the Jewish state had to face the growing probability that India's tests may have given Libya and Iran a new avenue to obtain the nuclear weapons they so strongly desire.

The key player in the scenario is Pakistan, another up-and-coming nuclear power. Eager to keep up with its larger neighbor in the arms race, Pakistan is looking for cash and scientific know-how.

Israel has long been concerned that to meet those needs, Pakistan will turn — or has turned — to rich Muslim states.

Not only might those states demand a finished nuclear bomb in exchange but they could demand that Pakistan join them in world terrorism.

Israeli observers say the fear of Iran acquiring nuclear weapons is the foremost concern of the U.S. administration, and it accounts for the severity with which President Clinton has reacted to India's move as well as his commitment to head off a Pakistani response.

Those observers say the president is determined to demonstrate that nuclear proliferation will be painfully punished, in the hope that the lesson will be learned in Iran and Libya.

Ironically, Israel, India and Pakistan are the only three countries widely believed to have a nuclear weapons capability that have not signed the Non-Proliferation Treaty.

All three countries have, for different reasons, adhered to a policy of deliberate vagueness in their public pronouncments connected to their nuclear capabilities.

Prime Minister Benjamin Netanyahu did not stray from that longstanding policy this week. When asked on American television for his reaction to news that India had detonated five underground nuclear tests, he immediately reiterated, "Israel will not be the first state to introduce nuclear weapons into the Middle East."

The meaning of that statement? Make what you want of it, Netanyahu advised his questioners.

But with India boldly deciding, under its new Hindu nationalist government, to step out of the nuclear closet, and Pakistan threatening to do likewise, people here wonder how long Israel's option of nuclear vagueness will remain available.

There could be, as a consequence of the world's sudden new interest in the danger of proliferation, a reawakening of international pressure on all three recalcitrants to sign onto the Non-Proliferation Treaty.

Israeli policy-makers, regardless of their political affiliation, are almost unanimous in their belief that Israel cannot afford to relinquish the vagueness posture, at least as long as the Israeli-Arab conflict remains unresolved.

Indeed, in a readily understandable paradox, it is often the staunchest softliners on Israel's hawk-dove spectrum who are the toughest proponents of Israel jealously guarding its nuclear capacity as the surest guarantee of its security.

Those doves believe that all progress made in the peace process rests ultimately on the Arab realization that Israel is ineradicable — in no small part thanks to the perception that the Jewish state has the ultimate weapon at its disposal.

On a more immediate and tactical level, Israeli officials are concerned that the country's relatively recent but burgeoning relationship with India in the sphere of military cooperation could fall victim to American sanctions.

This week, a delegation from Israel Aircraft Industries was visiting India in the hope of promoting military sales between the two countries.

Israel's proven expertise in aircraft maintenance and refurbishment is of particular interest to New Delhi, with its large but aging fleet of Soviet-made warplanes.

Israeli officials hope that signed contracts can be implemented without interference, despite Washington's anger at India.

But they say that if the United States is adamant about sanctions, the Israeli defense establishment could hardly enter into new contractual relationships with India.

For the moment, consultations among various government ministries and agencies in Israel have resulted in a decision not to rush into a knee-jerk endorsement of the American declaration of sanctions.

Further down the road, Israeli officials realize, some deft diplomacy will be required to keep all of these business dealings afloat.

Finally, the Indian decision to go public could well result in increased international pressure on Israel to free its famous atomic spy, Mordechai Vanunu.

Vanunu, a technician at the nuclear reactor in Dimona, was not really a spy in the classical mold: He gave detailed information in 1986 on the workings of the plant to the London Sunday Times because, as he has consistently maintained, he believes Israel should disarm unilaterally.

But he was sentenced to 18 years for passing secrets to the enemy and earlier this month a review board refused to commute his sentence by one-third, as is usually the case for well-behaved prisoners.

Vanunu's cause has been taken up by pacifist and leftist groups around the world. His imprisonment until this year in solitary confinement has come in for especially strident criticism both within Israel and abroad.

India's decision to forgo the comfortable protection of vagueness in its nuclear stance will certainly provide ammunition for the worldwide pro-Vanunu movement to argue that his crime looks less heinous — especially now that the walls of vagueness may be crumbling.