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JERUSALEM — Sharply criticizing U.S. overtures toward Iran last week, senior Israeli officials said this week that such moves will succeed only in encouraging a government opposed to the peace process and keeping a real democratic revolution in Iran at bay.

Last Friday, Secretary of State Madeleine Albright announced a series of policy steps — including lifting the ban on the import of certain luxury items — aimed at improving relations with Iran.

Speaking before the American Iranian Council in Washington, Albright highlighted democratic developments following last month's Iranian elections and said the administration is prepared to move toward bettering relations "step-by-step, or more rapidly if Iran indicates a desire and a commitment to do so."

Last month's elections left reformists with an overwhelming majority in Iran's parliament.

While formally Jerusalem would not criticize the United States, and top officials in the Foreign Ministry actually welcomed the move to rapprochement, several top Israeli officials privately expressed disappointment with the new stance, saying it is a mistake to reward the "untested" new government in Tehran.

"If and when Israel and Syria reach a peace deal, Iran will be the main force working against it, backing terror attacks here. Having reformists in the parliament does not change that," said one defense official.

"All our intelligence shows that giving the Iranians the carrot does not work, and therefore by trying to encourage Iran with nice words and actions, the United States is making a grave mistake."

Another official in the Prime Minister's Office said that Israel has "no reason at all" to follow the U.S. lead on Iran.

"We have a different understanding of the situation," he said.

"We believe that although the recent Iranian elections were indeed a positive sign, they continue to support terror and continue arming themselves with non-conventional weapons and continue ignoring human rights. So we see no reason to change our views about them."

But a senior Foreign Ministry official said his colleagues at the Prime Minister's Office and, in particular, the Defense Ministry "had got it wrong," and that intelligence recommendations against trying for a rapprochement may have been the right course before the elections in Iran, but are now outdated.

Senior U.S. officials clarified that the administration's new position does not in any way ignore the real problems with Iran, but rather seeks to address them in a more constructive manner.

The United States has already made several recent gestures to Iran aimed at repairing ties that were severed after the 1979 takeover of the U.S. Embassy in Tehran and the fall of the shah.

These include allowing the sale of replacement parts to Iranian-owned Boeing jets and the lifting of a ban on certain U.S. food and medicine exports to Iran. It has also promoted people-to-people exchanges between the two countries, including the facilitation of soccer and wrestling matches.

While President Clinton last week extended U.S. sanctions on Iranian oil, the administration has now decided to lift sanctions on Persian rugs, dried fruits, nuts and caviar.

"Quite dramatic changes, internal changes, have taken place in Iran," said one official, "and there is a clear indication that the people of Iran want to pursue a different, more pragmatic course based on the rule of law. If that can be translated into a change in national security policy, both the United States and Israel would benefit."

The U.S. assessment, the official added, is that reaching out to Iran will encourage the positive trends in the country, and the idea that only helping to promote a revolution can better the situation is "unrealistic."

The official further said, however, that there remains concern in the U.S. at efforts by "some elements in Iran" to disrupt the peace process.

"If there continues to be such opposition to the peace process and use of terrorist methods, this will certainly prevent our relations from developing," he said.

The Iran-Libya Sanctions Act, put into place because of U.S. concerns about Iranian proliferation efforts, comes up for review in the summer of 2001 and U.S. officials are hoping to have a renewed dialogue that would allow alteration of the act by then.

The overtures toward Iran received mixed responses from the American Jewish community.

The American Israel Public Affairs Committee said it supported the administration's decision to lift the ban on certain items, a move that would "not result in large flows of currency into Iran, which is necessary to finance its weapons-of-mass-destruction programs."

"We have no quarrel with the people of Iran, but rather with the policies of their government, especially with regard to its acquisition of weapons of mass destruction, opposition to the Middle East peace process, and support for international terrorism," said AIPAC spokesman Ken Bricker.

The Anti-Defamation League, on the other hand, said it is "premature to begin to normalize relations with a nation that has sponsored international terrorism, developed weapons of mass destruction, has shown continual hostility toward the state of Israel, and is about to try 13 innocent Jews on trumped-up charges of espionage."