NEW HAVEN— With the strike at Yale University entering its third week and no end in sight, the showdown is starting to exact sizable costs on both the university and the unionized workers.

Indeed, if the strike drags on much longer, some labor experts say, whatever the ultimate settlement includes will not compensate either side for the losses suffered during the walkout.

For Yale officials, the strike has been a public relations quagmire and has set back the university's efforts to repair its history of lamentable town-gown relations. For the 2,000 striking clerical, dining hall and maintenance workers, the walkout has meant two weeks of missed paychecks, fears of many more such weeks and worries about not being able to pay rent and utility bills.

A third group is also being hurt by the strike — Yale's students — even though they are supposedly mere bystanders. Many students complain that the atmosphere on campus has turned bitter, that most dining halls are closed and that they sometimes find it hard to concentrate in class when union bullhorns are bellowing outside.

"The strike is disruptive to the atmosphere here, and it's causing a pretty big rift on campus," said Taylor Chapman, an English major from Houston.

As often happens during strikes, each side is warning the other that to prevent even steeper costs, it would be wise to settle soon by making major concessions.

Union officials and their community allies warn that every additional day the strike lasts will further undermine an earnest decade-long effort by Yale's president, Richard C. Levin, to mend relations with working-class New Haven. These officials note that several large demonstrations have attacked Yale and that local clergy members and politicians have criticized Yale's behavior in the dispute.

"The hallmark of President Levin's tenure has been to improve town-gown relations, and all that is going up in smoke," said John W. Wilhelm, president of the Hotel Employees and Restaurant Employees International Union, the parent of the two union locals on strike. "When Yale puts workers in this polarized position, the cost to Yale, short term and long term, in its stature in the community is extraordinary. Since there are no issues of principle at stake for the university, it seems like an absurd price to pay."

But Dr. Levin insisted that the strike had not done major damage to campus life or town-gown relations.

"Our relations with most of the neighborhood leaders and community groups have remained very strong throughout this," he said, asserting that whatever frictions have developed resulted from union efforts to turn New Haven groups against Yale.

"It took some period of months after the 1996 strike to rebuild and strengthen some of the connections to the community that had been severed," Dr. Levin added. "I'm quite confident we can do that again."

Union leaders do not try to hide that the walkout is squeezing union members. "The cost for the workers is enormous," Mr. Wilhelm said.

The union is paying $250 a week in strike benefits, and has promised strikers help with rent if they face eviction. Nonetheless, many workers are worried about the economic strains of a strike. According to Yale's payroll figures, two-thirds of the 2,900 unionized clerical workers are reporting to work.

The union insists that more than half of the clerical workers are on strike, along with more than 90 percent of the dining hall and maintenance workers.

Laurene, a unionized financial analyst who earns about $27,000 a year and insisted that her last name not be used, said she crossed the picket line because "I couldn't go without pay."

Noting that many workers live paycheck to paycheck, she said the union could never recoup what the workers lose during the strike. "Once you've lost that week of pay, you never catch up," she said.

Mr. Wilhelm, a 1967 Yale graduate, asserted that the strikers would more than regain what they lose during the strike.

"People don't make a short-term mathematical calculation about going on strike," he said. "When we achieve fair pensions and fair salaries and a reasonable measure of job security, the workers will conclude, as in past struggles, that these struggles, while unwelcome, are necessary."

The dispute appears to be turning into a test of wills, rather than mere haggling over dollars and cents.

Union officials argue that Yale can settle the dispute at minimum cost. They say that meeting the union's pay demands would cost at most $2 million a year above Yale's offer. They say that meeting the union's demands to increase pensions by more than 50 percent would not require great pension contributions for at least six years because the pension fund is so overfinanced.

But Yale officials insist that meeting the union's demands would cost millions of dollars beyond what the university says is already a generous offer, calling for raises averaging more than 4 percent a year for the clerical workers.

Dr. Levin said recent changes in accounting assumptions resulting from lower interest rates had made the $200 million in pension overfinancing disappear. As a result, he said, any additional pension increases beyond what he said was a 20 percent increase offered by Yale would force Yale to increase its pension contributions.

Union negotiators say one obstacle to a settlement is that Dr. Levin may face criticism from board members and donors if he is perceived as giving too much or giving in to the union. Dr. Levin said he faced no such pressure, saying the university's offer was so generous that, unlike many employers, Yale has not demanded any givebacks.

As for whether the walkout would have lasting negative effects, James Yin, a freshman from Greenwich, Conn., said, "There have been many other strikes at Yale, and they didn't do much damage to Yale's reputation, so one more won't hurt so much."