Cosmic battle -- star gazers vs. a furry red relic of the Ice Age. Astrophysicists eye new perch for world's largest telescope

In a cosmic nutshell it's the star gazers vs. the red-squirrel lovers. Astrophysicists, seeking a perch for the world's largest telescopes, have their eye on Arizona's Mount Graham, a peak with near-perfect conditions for exploring the outer edges of the universe. But a group of Earth lovers says the Mount Graham International Observatory would devastate the mountain, which is host to living relics of the Ice Age, including a rare subspecies of squirrel.

The ensuing battle, now two years old, has pitted scientist vs. scientist and prompted a lofty question: Which is more important, discovering the secrets of the universe or preserving precious wonders on Earth?

The 10,720-foot peak, 75 miles northeast of Tucson, is a primary candidate for the National New Technology Telescope, a planned 15-meter reflector that would dwarf the reigning king, the Soviet 6-meter reflector. That futuristic device is among 12 others earmarked for the mountain, including an 11.3-meter telescope scheduled for completion by the early 1990s. Together, they promise to unlock the mysteries of star and galaxy formation, and refine the big-bang theory.

English-born Peter Strittmatter, director of the University of Arizona's Steward Observatory, says the government-owned peak is one of few that is sufficiently dry, dark, and economically suitable.

For years, urban light pollution has threatened the effectiveness of new-era telescopes on crowded peaks around Tucson, sites for Kitt Peak National Observatory, Smithsonian Institution, and Steward. And international astrophysicists, including those at Rome's Vatican Observatory and West Germany's Max Planck Institute for Radio Astronomy, also view Mount Graham as a key to the future.

No one knows what might be discovered; the telescope advances in the past have revealed surprises.

``Nobody predicted the existence of the quasars. Nobody predicted the existence of the pulsars,'' says Mr. Strittmatter, who is helping spearhead a quest for the observatory, which could cost $262 million.

But the astrophysicists, following a course begun when Galileo discovered the moons of Jupiter with the first telescope in the 17th century, have run head-on into scientific cousins who concern themselves with the mysteries of the Earth.

The reason is that Mount Graham is home to the southern-most stand of spruce fir, indemic insects, Arizona's largest population of black bears, and between 200 and 300 endangered red squirrels, a sub-species stranded on the mountain when Ice Age glaciers receded 10,000 years ago. And a motley 29-group coalition of hunters, naturalists, gun-enthusiasts, biologists, and the Sierra Club says the observatory would devastate their fragile habitat.

``It seems to me the observatory is a real slap in the face to the natural sciences,'' explains Paul Pierce, a Tucson businessman who leads the coalition. ``Mount Graham is like a relic Pleistocene museum for all of mankind to study.''

Refereeing the dispute is the United States Forest Service, which last week disclosed a draft environmental impact statement that made neither side happy. The proposal, which could become final early next year, would limit the development to five telescopes on seven acres, instead of 13 on 35 acres.

If implemented, it would bar the 15-meter telescope, which would stand 11 stories tall, resulting in its placement on Hawaii's Mauna Kea, a higher but more expensive alternative.

Observatory proponents say the proposal fails to recognize that logging, a summit road, campgrounds, and artificial lake and radio transmitters already have disturbed the mountain more than the observatory could. They also say accompanying conservation land would help protect the ecosystem, not hurt it.

``It's like putting a 30-foot silo in a 1,000-acre farm. It's really going to be insignificant,'' says Governor Aker, mayor of Safford, a 7,000-person town 15 miles north that hopes the observatory will bring an economic boom. Unemployment there has skyrocketed from downturns in copper mining and cotton and cattle farming.

The coalition says economic benefits would go elsewhere. And it predicts the Forest Service proposal leaves the door open for full development on the mountain. Lawsuits are expected.

One coalition member, the Tucson-based Earth First!, plans nonviolent, civil disobedience if any construction begins on Mount Graham, says spokesman Paul Foreman. ``We feel the longer it is delayed, the less likely it is the scopes will go up on Mount Graham,'' he says.