The Vatican and the Yad Vashem Holocaust Martyrs' and Heroes' Remembrance Authority got into a public spat yesterday over the wartime conduct of Pope Pius XII during the Nazi genocide, threatening to upset fragile relations between Israel and the Catholic Church.

The controversy came amid new developments in the Vatican's case to make Pius a saint. A massive dossier on Pius' virtues was handed over to a panel of bishops and cardinals earlier this month to study, church officials said yesterday.

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At issue in the Yad Vashem-Vatican dispute is a photograph of Pius in Yad Vashem's museum, with a caption saying, "Even when reports about the murder of Jews reached the Vatican, the pope did not protest, refusing to sign a 1942 Allied condemnation of the massacre of Jews."

The Vatican's ambassador to Israel, Monsignor Antonio Franco, confirmed yesterday that he would not attend Yad Vashem's memorial service for Holocaust victims next week, because of the Pius photograph. "I don't intend to go to Yad Vashem if things remain the way they do," he said.

Yad Vashem is shocked and disappointed by Franco's decision, said spokeswoman Iris Rosenberg.

The memorial service is traditionally attended by all foreign ambassadors to Israel or their representatives. Yad Vashem said this would mark the first case in which a foreign emissary deliberately skipped the ceremony.

Franco said in his letter to Yad Vashem that he found the Pius XII caption offensive to Catholics. "I respect the memory of the martyrs of the Holocaust but also the memory of the pope," he said. "The right of one does not infringe on the right of the other."