JERUSALEM, Feb. 4 (JTA) — The fruits of the Hebron agreement have quickly ripened for Benjamin Netanyahu. But a political scandal at home surrounding the appointment of a new attorney general has soured the Israeli prime minister’s enjoyment of his peace policy success. Increasingly, Israeli observers find themselves making comparisons to the early history of Watergate as they grapple with the deepening dissonance between Netanyahu’s rising star abroad and his messy problems on the domestic front. At the annual World Economic Forum over the weekend in Davos, Switzerland, Netanyahu was one of the most popular among the global political and business leaders in attendance. Netanyahu, long the target of international criticism as a hard-liner whose peace policies were leading to deadlock — and possibly disaster — was now widely feted as a pragmatist who had moved decisively to break the diplomatic logjam. Fellow heads of government sought private meetings with him, and the international media pursued him for interviews. A sign of Netanyahu’s enhanced international standing was his meeting in Davos with Egyptian President Hosni Mubarak, who had been Netanyahu’s most vociferous critic during the long months of the Hebron negotiations. The two men were all smiles now, with Mubarak inviting Netanyahu to Cairo and the premier’s wife, Sara Netanyahu, praising the Egyptian president’s son, a businessman representing a major British firm. With Palestinian Authority leader Yasser Arafat, too, Netanyahu had a friendly meeting. They scheduled a meeting for this week on the Israel-Gaza border to continue their discussions about further steps in the peace process. Israeli economists accompanying the prime minister voiced hope that the Hebron accord would quickly undo the damage to Israel’s standing as an investment address and a trading partner that the previous months of diplomatic regression had caused. There is optimism in Israel’s tourism industry that last year’s severe drop in travel will soon give way to a new boom, celebrating the resumed peace process and building up toward the millennium. Continuing his foreign travel after Davos, Netanyahu was cordially welcomed Monday at the Vatican and assured of a papal visit to Israel before the year 2000. Pope John Paul II pointedly praised the recent gains in the peace process, while voicing deep interest in further progress. Yet, while Netanyahu is feted around the world, at home he has been given scant time to enjoy his Hebron success. Within days of last month’s signing of the Hebron accord, Israel Television’s Channel One unleashed a political bombshell, accusing the prime minister’s aides of trying to barter the attorney generalship. According to the report, Jerusalem attorney and Likud activist Roni Bar-On was appointed attorney general last month because he undertook to engineer a plea bargain for Shas leader Aryeh Deri. The leader of the fervently Orthodox Sephardi party is on trial for charges of taking bribes and fraud and may face additional charges of misappropriation of public funds for party purposes. Deri threatened, according to the report, to withhold Shas’ crucial votes in the Cabinet for the Hebron accord if Bar-On were not appointed. In the end, Bar-On’s appointment lasted only three days. Under a hail of public protest — led by members of the legal profession who believed he did not have the proper stature for the position — Bar-On announced his resignation before he was even sworn into office. But the Channel One story refuses to die. For more than two weeks, the “Hebron-Bar-On affair,” as it has become known, has dominated the interest of the Israeli media and public. Netanyahu’s new popularity in foreign capitals deeply contrasts his perceived situation at home — a beleaguered political leader fighting to stave off criminal taint in the highest echelons of his administration. For instance, while Israeli media covered the premier’s meetings in Europe this week, Israel’s second major station, Channel Two, opened its prime-time news program Monday night with the disclosure that just hours earlier, police had questioned Jerusalem Mayor Ehud Olmert in connection with the Bar-On investigation. The central item on that newscast was a rare interview with Rabbi Ovadia Yosef, spiritual leader of Shas, in which he brushed off the accusation that his party, which holds 10 Knesset seats, had threatened to oppose the Hebron accord if Bar-On were not appointed. Veteran observers here recall that in the early stages of Watergate, President Nixon found his towering international successes — in China and elsewhere — soured repeatedly by nagging media inquiries about the seemingly picayune incident that a single U.S. news organization, The Washington Post, was determinedly reporting, day after day. The wider world looked on with bemused disbelief and incomprehension. The president’s foreign policy agenda seemed so much more momentous than the bizarre break-in at the Democratic Party headquarters. Regardless of the eventual outcome of the current Israeli police inquiry — an investigation that Netanyahu himself welcomed when it was announced — there are other parallels with Watergate. As with Nixon, senior aides to Netanyahu, rather than the head of government himself, are on the firing line at this early stage. In a television interview last week that has added to the tension surrounding the Bar-On affair, Netanyahu’s top aide, Avigdor Lieberman, accused the Israeli police of launching inquiries out of political motivation. Lieberman, a Russian immigrant who is director general of the Prime Minister’s Office and formerly was director general of the Likud Party, spoke bitterly of “racist discrimination” against Russian newcomers such as himself. According to Channel One, Lieberman was a key figure in the Bar-On affair. Indeed, the director general’s remarks in his interview appeared to dovetail with Netanyahu’s own often-stated resolve to batter down long-entrenched establishments dominating Israeli society. At the top of his list — shades of Nixon again — is the media, which Netanyahu accuses of persistent political bias against him. But the academic community and the legal profession are also seen in Netanyahu’s close circle as inherently hostile to the premier personally and to his ideas of how Israel should be governed. With Israel’s media and police in hot pursuit of the “Hebron-Bar-On affair,” the prime minister no doubt is relishing his return next week to the world stage. This time, he is headed to the Oval Office, where he is certain to be welcomed with open arms.