JERUSALEM, Aug. 8 (AP) - Asked about Al Gore's selection Monday of Sen. Joseph Lieberman as a running mate, Arabs and Israelis alike started their answers the same way: "It's an internal American matter, but ..."

The comments that came after the "but" showed just how much an Orthodox Jewish vice president with close ties to Israel could have an impact far beyond the United States borders: Israelis could barely contain their glee, Arabs their anxiety.

"He is a declared Zionist and has visited Israel many times and is a great friend to the state of Israel," said Moshe Arens, a legislator with the hard-line Likud party.

Lieberman is "knowledgeable about Israeli politics and the Middle East," said Efraim Innbar, a political science professor at Bar-Ilan University near Tel Aviv.

The two are distant relatives - Inbar's great-grandmother was a sister of Lieberman's grandmother - and meet at least once a year in Washington. Lieberman uses Inbar as a source for news and analysis about Israel.

Inbar said Lieberman's most noticeable traits are his warmth, intelligence and sense of humor. "He likes jokes about politics and politicians," Inbar said.

Hanan Ashrawi, a frequent spokeswoman for the Palestinians, said she hoped a future Gore administration would be fair to all sides in the Middle East. "I just hope that issues of Israeli relations don't become paramount and that the Democratic Party and Mr. Gore will try to be evenhanded in the peace process," Ashrawi said.

Lieberman has a solid pro-Israel record: In 1997, after a wave of anti-Israel bombings, he was the only Democrat to join five Republican colleagues in describing Yasser Arafat as the "villain" of the peace process in a letter to President Clinton.

Lieberman's support didn't flinch even when former Prime Minister Benjamin Netanyahu's tough line was at odds with Clinton administration efforts to unfreeze the peace process: Twice he joined others in urging the president not to "pressure" Israel.

The Likud - now in opposition - had fond recollections of Lieberman's friendship.

"I think that the friends of Israel in the United States have been given a strong ally who will be in the first row if he is elected," said Silvan Shalom, a Likud lawmaker trying hard to bring down Prime Minister Ehud Barak over the concessions Barak made at last month's Clinton-sponsored Camp David peace summit.

Such alliances rattled Arabs in the region.

"As Arabs, we do care that Lieberman represents the United States, not Israel, in the American administration," said Saleh Qallab, a former Jordanian information minister. Qallab worried that Lieberman's Orthodoxy could link him to extremist rabbis who have made comments about the Arabs criticized as racist. "If so, that would be a disaster."

Others who know Lieberman commended his ability to change his opinion - in 1999, for instance, Lieberman joined Clinton in leading a prayer breakfast at which Arafat was a star guest.

"He always listens, and he isn't afraid to change his mind," said Jim Zogby, president of the Arab-American Institute in Washington.

More significant for Israelis was the fact of a Jew nominated for the position often described as ``a heartbeat away'' from the leadership of the Western world.

Rabbi Michael Melchior, the Diaspora Affairs minister and the only government official willing to comment, prefaced his statement with the usual "I think that American politics should be left for Americans, but ... It is also a sign that the American society has matured enough to reach this point that a Jew like Joe Lieberman can achieve this candidacy for this high position."

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