NYT19980218.0466 NEWS NEWSWIRE The U.S. Holocaust Memorial Museum forced its director to resign Wednesday, ending an acrimonious tenure that was highlighted by an embarrassing on-again-off-again invitation last month to Palestinian leader Yasser Arafat. Several people close to the situation said that the invitation to Arafat _ which was extended, revoked, then extended again and finally spurned by the Palestinian leader _ was such a public relations catastrophe that the museum needed a scapegoat and landed on Dr. Walter Reich, the director. Some also suggested that while the Arafat debacle certainly triggered the ouster, internal tensions had been brewing for some time between Reich and the chairman of the museum's council, Miles Lerman. Lerman publicly blamed the Arafat debacle on Reich at the time, saying the director had given him ``bad advice.'' The invitation was highly controversial within the Jewish community. Some groups said it could serve as a step toward Arafat's education and potential reconciliation. Others argued that it would be a travesty to invite Arafat, who routinely compares Israel to Nazi Germany and has suggested that the Holocaust never took place. In the end, Arafat refused the invitation, largely, say those involved, because reports of a sex scandal in the White House were surfacing at the time and Arafat believed his visit, fraught with political risks for himself, would not have received the proper attention from the press and the White House. Arafat was mentioned only indirectly in the formal letters that passed Wednesday between Reich and Lerman after a four-hour, closed-door session of the museum's executive committee in which Reich's resignation was extracted. Reich, who has served as director since June 1995, agreed in the meeting not to seek renewal of his contract, which expires June 7. His letter said he would leave March 31. Reich and Lerman were described Wednesday as opposites with virtually no personal chemistry and deep philosophical differences. Reich, a psychiatrist with no curatorial experience, wanted to expand the museum as a seat of academic research. Lerman, a Holocaust survivor and now a real estate developer in New Jersey, was described as more eager to promote the museum politically and involve it in current events. Their differences exploded into public view in late January, giving the much-praised federal museum its biggest black eye in its five-year existence. The museum, which is visited by about 2 million people a year, holds the Western Hemisphere's largest collection of research material on the Holocaust. Of the current $49 million annual budget, about $30 million comes from the federal government and $19 from private donations. Reich was the museum's second director. He was hired after the first choice for the job, Steven Katz, an historian at Cornell, had to quit before starting because he misrepresented his academic credentials. The museum has never offered a precise reconstruction of the Arafat invitation, but people with knowledge of it say it originated with Aaron Miller, a deputy Mideast envoy at the State Department who is also a member of the museum's council. The idea was approved by his boss, Dennis Ross. Friends of Reich said Wednesday that Lerman agreed informally to the idea and extended the invitation, only then mentioning it to Reich. They said that the idea was presented to Reich only as an idea but in fact it was a fait accompli. Reich was skeptical, saying it would offend too many Jews. At that point, Lerman has said, he found Reich's arguments persuasive and called off the visit. That resulted in anger from the Clinton administration, which was hosting Arafat and Benjamin Netanyahu, the Israeli leader, in Washington, and from the public, which faxed letters to the museum overwhelmingly in favor of the visit. Lerman then re-issued the invitation, saying Arafat would be received as an official guest, not a head of state. Reich said he would not play host. At that point, as Lerman emerged from a closed-door council meeting Jan. 21, he blamed the debacle on Reich. But that was the day that reports of a sex scandal involving President Clinton and former White House intern Monica Lewinsky had broken publicly, and all of Washington was consumed with the story. Those close to the situation said that Arafat, who had already been ignored by the press as Clinton was questioned about the scandal by reporters, was worried his visit to the museum would not receive the proper attention that such an historic occasion deserved. His aides said at the time that his schedule allowed no time. In his letter Wednesday, Reich alluded to the Arafat episode: ``As you know, we have differed on the use of the museum, and of the memory of the Holocaust, in the context of political or diplomatic circumstances or negotiations,'' he wrote. He said he also favored ``an improved governance relationship and informational flow'' between the chairman of the council and the museum director. Daniel Schorr, a friend of Reich and a senior news analyst at National Public Radio, said in an interview that this ``informational flow'' referred to Lerman's failure to convey to Reich that the invitation to Arafat had already been extended when Reich suggested it would not be a good idea. ``This was a blunder by the State Department, when they went and practically invited Arafat without consulting Walter Reich at all,'' Schorr said. ``Miles is a presidential appointee, who is hoping to be reappointed in June, and he went along with what the State Department wanted.'' Lerman would not comment Wednesday about Reich's ouster. Neal Sher, a former prosecutor of Nazi war criminals, former executive director of the American-Israel Public Affairs Committee and a friend of Reich, said that had Reich known the invitation had already been extended, he would have handled the matter differently. He said Reich was being treated in such an ``unseemly'' manner that ``one has to wonder what type of successor to Walter Reich can be attracted.'' Marvin Kalb, director of the Shorenstein Center on the press, politics and public policy at Harvard, and also a friend of Reich, said Wednesday's ouster was triggered by Arafat but ``it reflects a deeper philosophic difference, rooted in the central vision of whether the Holocaust Museum should be used tactically and politically and Reich feeling that this was wrong.''