JERUSALEM -- By formally acknowledging Jordan's trusteeship over Jerusalem's Moslem shrines last week, Israel has fanned the fires of a new battle for control of the much-contested, much-bloodied city.


Until the Israel-Jordan peace pact in Washington, in which Israel recognized a "historic" Jordanian claim to the religious sites, the sensitive issue of territorial control over Jerusalem appeared to be safely set aside for future jousting.


Now the battle for Jerusalem -- for its shrines, its real estate, its political denomination, its very stones -- has taken on a religious dimension that may prove even more divisive. That shift infuriates Yasser Arafat, chairman of the Palestine Liberation Organization, who fears his claim to Arab East Jerusalem as the capital of a future Palestinian state will be undercut. Israel and the PLO, under the terms of their own bilateral agreement, are to begin negotiations on the city's final status no later than May 1996.


The change in focus also pricks the interest of Saudi Arabia's monarchy, which contests the religious claims of Jordan's King Hussein to sole custodianship of the Islamic shrines on the Temple Mount. It also opens the door to similar claims for religious sovereignty over Jerusalem property from other Arab states, the Vatican and other Christian faiths.


"If this (Jerusalem) is viewed not as a Palestinian territorial claim but as a Moslem holy shrine, it means the Temple Mount doesn't only belong to Arabs living in Jerusalem," said a Hebrew University political scientist, Shlomo Avineri. "So the Moslem religious presence has a political presence -- and King Hussein should be the custodian."


Avineri, like many Israeli analysts, considers the recent developments a "brilliant" move by the government, which has now provoked an open breach between Arafat and his antagonist King Hussein. The Jordanian leader, whose Hashemite dynasty claims direct descent from the Prophet Mohammed, has spoken repeatedly and vehemently since last September's PLO-Israel accord of his family's "special" rights in Jerusalem.


The Washington statement, in fact enshrining Jordan as one of the legitimate claimants to the city, triggered a violent reaction from the PLO. When the king embellished his claim Wednesday by buzzing Jerusalem from the controls of a Jordanian jet, PLO activists in the West Bank took to the streets in protest.


Arafat, who has settled in the Gaza Strip after 26 years of exile but has not yet been able to visit Jerusalem, sought to erase the distinction between religious and political claims to the city.


"For us, Jerusalem is one issue, one cause," he said last week. "It is not only a political issue, it is a sovereignty issue; it is an issue of holy, sacred places for Christians and Moslems."


Arafat accused Israel of violating its agreement to do nothing to prejudice the final-status negotiations on the city.


He demanded that those talks begin immediately: "OK, if they (the Israelis) have decided to start now, we are insisting on starting now," he said.


Israeli Prime Minister Yitzhak Rabin immediately rejected the demand, repeating the official Israeli stance that Jerusalem is its eternal capital.


For its part, Jordan has attempted to quiet the furor. In the past few days, Jordanian officials have repeatedly assured the Palestinians that they have no territorial claims.