VATICAN CITY, May 31 (RNS)--Despite horror in the Vatican and hesitation at Rome's City Hall, gay rights activists have every intention of going ahead with a World Gay Pride festival this summer in the midst of Holy Yearcelebrations.

The event, scheduled for July 1-9, has stirred debate over humanand civil rights and just how separate the Italian state is from theRoman Catholic Church. It has also landed both Prime Minister GiulianoAmato and Mayor Francesco Rutelli in political hot water.

Adding fuel to the fires of controversy is a videotape thatArchbishop William Levada of San Francisco sent to the Vatican, whichshows revelers allegedly committing acts of desecration during a 1998Gay Pride gathering in the American city.

"Gay Pride? Not now and not in Rome," Cardinal Camillo Ruini, thearchbishop of Rome, declared. Ruini, who serves as president of theItalian Bishops Conference, is considered a possible successor to PopeJohn Paul II.

But the organizers of the festival, the Circolo Mario Mieli, saidthey already had rerouted their parade to stay clear of the basilicasvisited by Holy Year pilgrims and had moved the festival back one weekso as not to interfere with Rome's celebration of the Feast of SS.Peter and Paul, the city's patrons, on June 29.

And that, they told the mayor this week, is as far as they areprepared to go.

Neither the Vatican nor the gay activists raised the question of thechurch's attitude toward homosexuality, which is at the root of thecontroversy. The pope, like his predecessors, holds that to be ahomosexual or lesbian is not a sin, but that to perform a homosexual orlesbian act is.

World Pride Rome 2000 has been in the works for three years, and itsorganizers at first got a warm reception from Rutelli, a former memberof the Radical and Green parties who heads a center-left citygovernment.

Imma Battaglia, president of the Circolo Mario Mieli--named for agay rights activist who committed suicide in 1983--showed reporters a1997 letter in which the mayor offered Rome as "a city that has beenknown around the world for two millenniums for its cultural openness."

Nor did the Vatican appear to be unduly concerned--at first. Cardinal AngeloSodano, who as secretary of state ranks just behind the pope in theVatican hierarchy, commented in February that he trusted "the goodsense of the Romans and the Italians."

Things began heating up in April when Francesco Storace of theright-wing and formerly neo-fascist National Alliance won election aspresident of the Lazio region, which includes Rome. His first act aftertaking office was to formally ask the national government to call offthe festival.

Questioned as to where he stood on the matter, Amato, a formersocialist, sided with Storace for the first and, say political analysts, almost certainly the last time. He told the Chamber of Deputies, the lower house ofParliament, on May 24 that "unfortunately" the Italian constitution doesnot allow the government to block the demonstration.

The prime minister said the event "is clearly an attempt tochallenge" Holy Year celebrations. He said he feared that "such ademonstration would be inopportune during the Jubilee" and that hebelieved "it would be best to hold it in some other year."

Amato found himself praised by his political opponents and attackedby his allies in the Democratic left. "One of the ways to measure acountry's level of civilization is how it treats gays, lesbians, andtranssexuals," said Maruo Coffaro, the party's civil rights spokesman.

Then it was the mayor's turn to take the heat. Rutelli has workedclosely with the Vatican on the logistics of Holy Year, which isexpected to bring some 30 million pilgrims to Rome, and the controversyplaced him in an awkward position.

On Monday, the City Council withdrew Rome's officialsponsorship of the July 8 parade, billed as the highlight of thefestival. The council said the organizers had not provided sufficientassurances of being able to "discipline the event" so as to "safeguardthe city's regular business."

The council's decision meant that the marchers could not use theRome logo and that the $175,000 the city appropriatedfor the event would be used exclusively to pay police overtime andprovide sanitary and medical services.

Katia Bellillo, equal opportunity minister, immediately objected,saying, "At stake here is the democratic and secular nature of theRepublic of Italy." Rutelli's wife, journalist Barbara Palombelli,publicly sided with his critics.

Amos Luzzatto, leader of Italy's Jewish communities, told the Romenewspaper Il Messaggero that Italian Jews "are really sorry about thisdebate against homosexuals." He said Jews and homosexuals suffered"indescribable horrors" side by side in the death camps of World War II,"we with our yellow stars and they with their pink stars."

Meeting Tuesday with a delegation of angry gay rightsactivists, Rutelli suggested they postpone the festival for another 10days so it will take place while the pope is on vacation in northernItaly and fewer pilgrims will come to Rome.

The activists refused.

"This," Rutelli responded, "is just the most evident of the manyproofs that the Gay Pride organizers are unwilling to negotiate thearrangements, which would be the basic requirement to obtain the city'sofficial sponsorship."