JERUSALEM. — Jerusalem -- Yitzhak Rabin's coalition is the closest to a peace government Israel has had since 1977. Composed of two left-of-center parties in addition to Mr. Rabin's Labor base, and .. with the backing of the two Arab parties, the new government has a strong majority of peace advocates.
Yet Mr. Rabin, through his flirtation with the right-wing Tsomet party during the coalition negotiations, has tried to give the impression that he is pursuing a centrist position -- just as he did during the election campaign, when he succeeded in attracting the center of the Israeli electorate away from ex-Prime Minister Yitzhak Shamir's Likud bloc. Indeed, Mr. Rabin's post-election differentiation between ''security'' and ''political'' settlements and his announcement that he would not dismantle any existing settlements were moves aimed at reassuring the swing Israeli voter that he would protect Israeli security and be a tough bargainer in the peace process.
Nonetheless, his government's announcement of the temporary halting of money for all contracts for housing construction -- including, pointedly, housing construction in the occupied territories -- and his avowed goal of achieving a Palestinian autonomy agreement within nine months indicate that Mr. Rabin -- unlike Mr. Shamir -- is genuinely committed to moving the peace process forward, albeit slowly and carefully.
Ironically, Palestinians are afraid that the United States will now pressure them to accommodate to the new prime minister. The Palestinians appear to be split into three groups.
One group, including Yasser Arafat and made up primarily of Fatah members but also including Palestinian communists, may be termed cautiously optimistic. It hopes that Mr. Rabin will give the Palestinians genuine self-government, but fears that, with Mr. Shamir out of power, the Palestinians have lost the moral high ground. Indeed, many now feel that the U.S., arguing that ''this is the best Israeli government you are likely to get,'' will pressure them into agreeing to settle for what Mr. Rabin offers.
A second group, also made up primarily of Fatah members, is less optimistic, remembering General Rabin's conquest of the West Bank and Gaza in 1967. These Palestinians question whether he would really give this territory up. They also remember him Defense Minister Rabin, who responded to the intifada uprising with the order to ''break their bones.'' (Mr. Rabin's tough stand during the intifada, however, made him electable this year.) They see no difference between Mr. Rabin's ''security settlements'' and Mr. Shamir's ''political settlements.''
Finally a third group, composed primarily of Islamic fundamentalists but also members of the Popular Front for the Liberation of Palestine and the Democratic Front for the Liberation of Palestine, opposes all negotiations with Mr. Rabin. The Islamic fundamentalists take this position because they feel that all of ''Palestine'' is Islamic; they refuse to recognize Israel's right to exist. Members of the Popular and Democratic Fronts also oppose negotiations with Israel at this time, in part because they see little difference between Messrs. Rabin and Shamir, in part because they feel that the Palestinian movement, after the losses it suffered for its support for Saddam Hussein in the Persian Gulf War, is in too weak a position to negotiate. Consequently, they urge the mobilization of the Palestinian community to oppose the peace talks.
The key question in the short run is how to build support among the Palestinian ''man in the street'' for the peace process. Precisely because the euphoria of the Madrid Peace Conference has disappeared and the peace process, so far, has yielded few gains for the Palestinian negotiating team, a gap has opened which the Islamic fundamentalists have been trying to fill -- with some success as the election for the chamber of commerce in Ramallah indicated. The question, therefore, is what Mr. Rabin can give the Palestinians, without alienating the ''Israeli street'' whose support he wants in the 1996 elections.
In moving ahead with the peace process, the new Israeli prime minister has to balance a number of pressures. He will be under pressure from the doves in his own party, along with Meretz and the Israeli Arabs. He will also be pressured by the United States as President Bush anxiously looks for foreign political successes before the U.S. election.
Yet the U.S.-Israeli relationship is not what it was last September when Mr. Bush angrily refused to support the long-sought loan guarantees to Israel because of the Shamir government's proliferation of settlements in the occupied territories. In the first place, the position of the American president is much weaker. Serious economic problems in the United States, as well as increasingly persuasive claims that the Bush administration pampered Saddam Hussein before the war, have put the U.S. president in an uphill battle.