Despite their close cooperation in the war against Iraq, Israel and the United States have managed to get themselves into a surprising public dispute.

The matter has embroiled even U.S. President Bush and Israeli Prime Minister Yitzhak Shamir.The angry words between the two governments suggest their recent cooperation in the war in the Persian Gulf has done nothing to resolve their longstanding disputes and suspicions.

The trouble erupted at the end of last week when the Israeli ambassador in Washington, Zalman Shoval, complained publicly about the failure of the United States to provide financial help for Israel.

Shoval said Washington was delaying aid for Soviet immigrants now arriving in Israel and had failed to compensate Israel for financial losses suffered during the gulf conflict.

The complaint about Israel's losses as a result of the war appears to be simply a money problem. Although it is not a direct participant in the war, Israel is faced with steep costs.

On top of military costs, Israel faces a massive bill for damage to thousands of buildings as a result of Iraq's missile attacks. There are also indirect costs such as a drastic loss of tourist dollars.

As he was outlining all this to Reuters News Agency, Shoval said "we demand that these needs and necessities be addressed as swiftly as possible." He accused the United States of giving Israel the "runaround" on its loan request.

Washington did not appreciate the peremptory tone of the ambassador's remarks - especially since the United States already gives Israel $3 billion in aid a year. However, the dispute about aid for Soviet immigrants reveals a more profound political dispute.

Secretary of State James Baker has told Congress that the United States is holding up Israel's request for $400 million in loan guarantees until Washington gets the Israeli plans.

At the very moment that Israel was beginning to bring heavy pressure for the loan guarantees, it was revealed that Israel is planning to build 12,000 new homes for Jewish settlers in the occupied territories of the West Bank and Gaza.

The Bush administration strongly opposes further Israeli settlement in the occupied territories.