By Pam Belluck

PALOS HEIGHTS, Ill., Aug. 7 – When a mosque offered to buy a church building and move into this suburb southwest of Chicago a few months ago, there were those who worried that it might not be universally welcomed.

Even the pastor of the church that was up for sale, the Reformed Church of Palos Heights, anticipated that some residents of this overwhelmingly white and Christian community, some of whom fled the diversity of Chicago, might be uncomfortable with a mosque in town.

At public meetings, some residents spewed derogatory comments, telling the Muslis to go back to their own countries, and implying that their money could have come from a nefarious source. One woman, in a television interview, said she believed Islam was a “false religion.”

Two City Council members made remarks that were insensitive, or at best ignorant. They also said the city should buy the building for us as a recreation center, although they had not raised the idea in the two years the church had been for sale.

Then things got stickier.

The City Council voted to pay the Al Salam Mosque Foundations $200,000 to walk away from Palos Heights. To the surprise of some, the mosque foundation accepted the offer. Then the may of Palos Heights, Dean Koldenhoven, vetoed the buyout, saying he considered it an insult to Muslims.

Now, in a most unusual case, the city of Palos Heights is the target of a federal civil rights lawsuit. The mosque foundation is seeking $6.2 million, saying the city’s handling of the situation amounted to religious discrimination, conspiracy and unwarranted meddling in a private real estate transaction.

“The mosque found it almost impossible to worship there,” said Rouhy Shalabi, a lawyer for the mosque foundation, which had been looking at the building of tawny brick and green siding as a replacement for its rented building in Chicago. “There was a cloud hanging over us in terms of not being welcomed by the city. And then the buyout offer was made and vetoed. We were really left with not choice,” but to sue.

Some in Palos Heights, a suburb of middle-class homes and strip shopping centers founded about 40 years ago, say the residents who made the offensive comments were not representative of most of the city’s population. Some longtime Muslim residents said they felt welcome here, although some were not sure if their neighbors knew they were Muslim.

“It’s the old story of the majority stays silent, the bad voices spring forth,” said the Rev. Edward Cronin of St. Alexander’s Catholic Church. “The core of Palos Heights, these are good people. They would have welcomed them.”

The controversy has left its mark on Muslims in Palos Heights, who make up about 450 of the city’s 12,000 residents. Many were stung and angered by the show of prejudice. But, while they would have attended the proposed mosque, some criticized the lawsuit.

“I’m being put between a rock and a hard place,” said Edward Hassan, a developer who has lived here for more than 30 years and who spoke up against the insensitive comments in public meetings. “The buyout, to me, it was an insult. They should never have been offered money, and they never should have accepted it. I really don’t think that lawsuit should have been filed. It’s harmful to both sides.”

Omar Najib, a lawyer from neighboring Palos Park who would have attended the mosque, said he understood that the mosque foundation felt “fearful for their safety” and “did not want to make people uncomfortable” in Palos Heights.

But speaking of the lawsuit, Mr. Najib who heads a chapter of the American-Arab Anti Discrimination Committee, said, “If you feel it’s getting to be too hot for you, walk away with honor and dignity, but don’t reduce yourself and diminish our religious faith for a few dollars.”

The dispute began soon after the mosque foundation signed a $2.1 million contract in March to buy the Reformed Church and sought the city’s assurance that it could use the building as a religious institution, just as the church had. At the City Council zoning committee meeting on the matter, some residents and two council members questioned the purpose and practices of the mosque.

“What you are proposing is like upside down,” said Alderwoman Julie Corsi, noting that the Muslim day of worship is Friday. “Yours is on Friday, and then you are not going to use it on Sunday. It’s kind of like comparing apples and oranges.”

Later, in a newspaper article, Alderman Jim Murphy, speaking of how he wished the City Council had acted earlier to by the church for use as a recreation center, said, “If someone had intervened early on to stop Adolf Hitler, there might not have been a world war.” Mr. Murphy later apologized.

The mayor of Palos Heights, Mr. Koldenhoven, condemned the comments. And when Mr. Murphy, the mayor’s political rival, proposed the buyout offer in June, Mr. Koldenhoven called it insulting and “fiscally irresponsible.”

“We don’t want to be known as a city that says we don’t want to welcome these people,” the mayor said recently.

Yet, to the mosque foundation the money from the buyout offer would have allowed it to cover its legal expenses and search for a more accepting community, Mr. Shalabi said. Even if the mayor meant well by vetoing the buyout in July, the mosque saw it as another example of city interference in its private business.

Now, it seems, everyone involved in the matter is bruised and battered. A Justice Department official has offered to mediate the lawsuit and proposed community meetings to foster dialogue between Muslims and Christians.

“This whole incident has raised some very significant issues in people’s lives that they have not had to struggle with,” said the Rev. Peter Semeyn of the Reformed Church. “Unfortunately, when some people think of Muslims they think of the people who bombed the World Trade Center. They don’t think of the people who live across the street. The question is how do we all get along with each other?”