Portrait Of David as a Young Goliath THE YELLOW WIND by David Grossman Translated by Haim Watzman; Farrar, Straus & Giroux; 216 pages; $17.95

By R.Z. Sheppard

The Israeli newsweekly Koteret Rashit last year asked Novelist David Grossman to contribute an article about the nation's 20-year occupation of the West Bank, the territory won from Jordan during the Six-Day War. Grossman spent seven weeks there before writing of the daily lives of the Palestinians and the Jewish settlers, who call the conquered lands Judea and Samaria. His well- turned personal reportage, which in book form became an Israeli best seller, restated an old controversial question: At what political and moral cost does Israel take under its iron wing the lives of some 1.5 million Palestinians, many of whom are landless and jobless refugees from the war?

By dramatically suggesting that the price is too high for a small beleaguered democracy, Grossman became the new focus of an ongoing wrangle. To hard-liners he was just another yefei-nefesh, or beautiful soul, the Hebrew equivalent of "bleeding heart." For better and for worse, this is true. The Yellow Wind puts a human face on the enemy whom many Israelis would rather not look at. Grossman talks to a member of the outlaw militant Jewish underground in the West Bank town of Ofra, and concludes, "He does not want to think even for a minute about the situation of the Arabs around him, because he is caught up in a struggle with them, at war . . . and were he to allow himself to pity, to identify, he would weaken and endanger himself."

The Jews and Arabs who found their way into Grossman's book no longer worry about who cast the first stone, who knocked out the first eye or the first tooth. The etiology of the conflict has long since been rendered moot by reciprocal violence and the hardening of mutual hatreds. As read in the West Bank, history comes with a curse. A conversation between Grossman and a young Palestinian teacher in the refugee community of Deheisha:

" 'You don't want to leave here for a better place?'

" 'Only for my homeland . . .'

" 'And you don't dream sometimes, only dream, that you might live in a better place?'

" 'Dreams?' She laughs. 'I have a responsibility,' she says, 'to the suffering my parents endured, and to my own suffering.'

" 'And because of responsibility to suffering you won't try to achieve even limited possible happiness?'

" 'I can't. I don't want to.' "

Elsewhere, the Palestinian lawyer and author Raj'a Shehade refines this sullen fatalism as sumud, a word he uses to express his determination to endure and outwait Israel: "Of the two ways open to me as a Palestinian -- to surrender to the occupation and collaborate with it, or to take up arms against it, two possibilities which mean, to my mind, losing one's humanity -- I choose the third way. To remain here. To see how my home becomes my prison, which I do not want to leave, because the jailer will then not allow me to return."

Grossman himself comes to see both sides locked in an "unbreakable prison of circumstance." Yet his understanding of that circumstance is frequently overshadowed by what journalists call the human-interest angle. Because they have been losers in the military struggles between Arab and Jew, Palestinians make good underdogs: the old woman in Deheisha who reminds the author of his exiled Polish grandmother; the impoverished Arabs who constitute a cheap and illegal work force for Jewish businesses. When satellites transmit television pictures of heavily armed Israeli troops attacking rock-throwing teenagers, it % is easy to feel that David has become Goliath. It is easier still to forget that the handiwork of P.L.O. terrorists once shocked viewers even more. Grossman describes the time-consuming and often humiliating security searches conducted on Arabs crossing the Allenby Bridge from Jordan. He sympathizes with a little girl who has her doll confiscated unnecessarily, but conveniently rolls over the fact that without these operations the young Arab demonstrators now on U.S. TV screens would probably be throwing smuggled hand grenades at civilians.

Grossman's selection of West Bank Jewish settlers is an unpleasant lot: intransigent, arrogant and frightening. "I fear life among people who have an obligation to an absolute order," he writes convincingly. "Absolute orders require, in the end, absolute deeds, and I, nebbish, am a partial, relative, imperfect man who prefers to make correctible mistakes rather than attain supernatural achievements."

Good luck. The part of the world that Grossman lives in made its name on supernatural achievements. Zionism was largely a social and political movement led by secular Jews, but its realization 40 years ago in Israel owes much to the strength of an ancient faith. Unfortunately, its enemies are also discovering the power of pious thinking. Spurred by the Iranian example, militant Islam is spreading in the Middle East, where religion and real estate go together like Cain and Abel. It will be no place for a nebbish.