JERUSALEM — Will a post-Saddam Middle East herald a new promise of regional peace or dire consequences for the Jewish state?

As the anticipated American showdown with Iraq nears, the Israeli defense establishment is sounding increasingly optimistic about the outcome.

Not only will war on Saddam Hussein remove a potential nuclear, biological and chemical threat to Israel, they say, it will also open up possibilities for peace with the Palestinians, the Lebanese and possibly even the Syrians.

Skeptics, however, warn that America's grand plans for the Middle East might prove to be overly ambitious, and, if the United States bogs down trying to do too much, the results for Israel could be disastrous.

And even if things don't go badly wrong, the skeptics say, the end result of U.S. military action could be far less dramatic than Israel's leaders hope.

The debate is significant as Israelis grapple not only with the immediate implications of a war against Iraq, including the possibility that such a war could prompt attacks against Israel itself, but the long-term impact as well.

The Israel Defense Force's chief of staff, Lt. Gen. Moshe Ya'alon, foresees a "regional earthquake" creating a "new regional order" and predicted the end of the Palestinian intifada.

"Remember," he said in an interview earlier this month with Yediot Ahronot, "the last Palestinian intifada ended in 1991, with the last Gulf War."

Amos Gilad, Israel's newly appointed "national commentator" on the war with Iraq, called the imminent American strike a "miracle."

But how likely is the anticipated American attack to have the kind of impact Israeli leaders are hoping for?

Former Mossad chief Shabtai Shavit reportedly warned officials in the United States that a failed attempt to democratize the Middle East could lead to major regional instability.

It could prove to be a recipe for all-out war between the United States and the Muslim world, and a nightmare scenario for Israel, he said.

Shlomo Brom, a senior researcher at Tel Aviv University's Jaffee Center for Strategic Studies, gives an example of how things could start to go wrong.

"U.S. military government in Iraq," he says, "would strengthen the perception of the war as Western colonialism in new clothing. The result will be similar to the Israeli experience in Lebanon in 1982, which started with the population throwing rice and flowers, and ended with Hezbollah."

Even the skeptics don't deny that taking out Saddam and his weapons of mass destruction would be a major strategic boon for Israel. But they would like to see the United States move out of Iraq as soon as the job is done.

Moreover, they don't deny that a regime change in Iraq could put considerable pressure on the Palestinians to move forward in negotiations with Israel.

Indeed, many Israeli analysts believe Palestinian efforts to re-engage Israel in cease-fire and peace talks, and to establish a more pragmatic leadership stem from a fear of being steamrollered by the United States and Israel in a post-Saddam Middle East.

The key, American, European and Israeli leaders believe, is whether Arafat steps aside.

But some Israeli officials are brushing aside the Palestinian Authority president's promise last Friday to appoint a prime minister who would assume most of the day-to-day operations of the Palestinian Authority.

With Arafat still at the helm, skeptics like Amidror say, nothing will go forward even after Saddam is removed from power in Baghdad.

Similarly, Amidror questions Halevy's vision of quick progress in a post-Saddam era on Israel's northern border, with Syria, Lebanon and Hezbollah.

"Why should toppling Saddam weaken ties between Syria and Iran, their presence in southern Lebanon and their support for Hezbollah?'' he asks.

On the contrary, should things go wrong in the war with Iraq, Amidror foresees potential for an armed showdown between Israel and Hezbollah.

Then, he says, Hezbollah — with an estimated 1,000 Katyusha rockets trained on Israeli targets — could be encouraged to attack.

The truth may turn out to be somewhere between Halevy's rosy optimism and Amidror's bleak caution.

But one thing is certain: War in Iraq would create new conditions in the Middle East and unleash new forces.

How they affect Israel's position in the region remains to be seen.