Israel's extraordinary restraint against Iraqi missile attacks has improved ties with the United States and analysts think it is likely to strengthen the Jewish state's hand in post-Persian Gulf War peace efforts.

Despite a firm national policy of retaliating for all attacks, Israel has held back, allowing the U.S.-led Arab and European coalition to pummel Iraq with air raids on Scud missile sites that hit Israel on two nights last week.The United States and many of its allies have appealed for continued restraint, fearing direct Israeli involvement could drive Arab governments, most of which are still technically in a state of war with Israel, out of the anti-Iraq coalition.

Israel has reasserted its right to defend itself and to retaliate at an appropriate time but so far has not done so.

"Israel's stock in both the White House and the Congress has probably never been higher than it is at present," said Rep. Stephen Solarz, D-N.Y., and one of the leading foreign policy experts in Congress.

Its restraint "generated considerable appreciation and approval in Washington," he said.

Middle East expert Joyce Starr said Washington would be heavily indebted to Israel for cooperating at a crucial time, but a senior U.S. official challenged that assumption.

Asked how much the United States might owe Israel for not retaliating, the official told Reuters:

"How much is Israel going to owe the United States? (Iraqi President) Saddam Hussein is a much bigger threat to them. We've taken out his nuclear, chemical and biological capability. I think that's probably why you've seen the response you've seen (from Israel)."

"I don't think anybody owes anybody," he added.

Nevertheless, Israel's cooperation is expected to have a big impact on the pro-Israel U.S. Congress, which approves aid and arms sales, and has already had an effect in other ways.

The United States and Israel have long been key allies. But relations had been difficult due to Israeli Prime Minister Yitzhak Shamir's hard line on the Arab-Israeli peace process. Suddenly, that has changed.

Not only has direct communication increased - President Bush has telephoned Shamir several times in recent days - but political trust is increasing between the two governments, Starr said.

In an apparent effort to encourage further restraint, Deputy Secretary of State Lawrence Eagleburger Sunday made his second visit to Israel in a week.

U.S. officials have said little about Eagleburger's visit, but analysts do not doubt he carried political commitments to encourage Israel to maintain its low profile.