JERUSALEM (AP) _ Israel dropped its request for the extradition of a Islamic leader it accuses of terrorism, saying Thursday that prosecuting him now would only worsen a crisis in Israeli-Palestinian relations.

Mousa Abu Marzook, political chief of the militant group Hamas, is currently in U.S. custody in New York, where he was arrested on arrival at John F. Kennedy International Airport in July 1995.

With Israel deciding that trying the Hamas leader isn't worth the risks, diplomats are pursuing the possibility of getting him off the hands of the United States and Israel by sending him to Jordan, Israeli news media said.

``Abu Marzook deserves to spend many years of his life in jail _ but we are aware of the dangers and the implications of the project called Abu Marzook,'' Defense Minister Yitzhak Mordechai told Israel Television from Washington.

Israel's announcement Thursday came days before a deadline for a decision on Abu Marzook's extradition on charges he planned and financed attacks against Israel.

Abu Marzook insists he has no involvement with Hamas' militant wing, which has claimed responsibility for deadly bombings in Israel.

A U.S. federal court judge, however, ruled in May that there was cause to believe Abu Marzook was involved in 10 attacks from 1990 to 1994 in which 47 people were killed and 148 injured.

Israeli officials feared that if he were extradited to stand trial in Israel, Hamas would use the case as a rallying point for new protests and attacks.

Extradition would be especially sensitive now, when peace talks have broken off and Palestinians are rioting daily in the West Bank and Gaza Strip to protest new Israeli building in disputed east Jerusalem.

There have been three suicide bombings since last month, killing three Israelis and the attackers themselves.

``The decision was taken on the basis of overall considerations concerning security and the prevention of terrorist attacks,'' according to a statement from Prime Minister Benjamin Netanyahu's office.

Netanyahu risks accusations from hard-liners that he was giving way in the face of terrorist threats. But in Washington, Attorney General Janet Reno said Israel was primarily concerned about avoiding worsening the atmosphere for peace talks.

Israel ``took this action in an effort to foster an atmosphere in which the renewal of Palestinian efforts against terrorism can be obtained and a negotiation process placed back on track,'' Reno said.

Jordan's information minister, Samir Mutawe, described the Israeli decision as a ``positive development'' but said there had been no official U.S. request that Jordan take in Abu Marzook.

Jordan had expelled Abu Marzook in 1995, when King Hussein came under pressure from Israel, the United States and the Palestinians to crack down on the militants.

The Hamas chief dropped his fight against extradition in January, forcing Israeli leaders to weigh the advantages and dangers of bringing him home for trial.

Netanyahu's office said Israel had ``suspended'' its request for Abu Marzook's extradition, but legal experts said the decision meant Israel would never again seek to try the Hamas leader.

In New York, U.S. Attorney Mary Jo White sent a letter to U.S. District Judge Denise L. Cote on Thursday saying that Israel's decision means the United States is no longer seeking to detain Abu Marzook for extradition.

But she noted that he will remain detained because the Immigration and Naturalization Service is seeking to permanently bar him from entering the country.

Any requests for his release should be made with the INS, she said.