  We give a new characterization of the class ${\bf N}^0_{\mathfrak M}[-1,1]$
of the operator-valued in the Hilbert space ${\mathfrak M}$ Nevanlinna
functions that admit representations as compressed resolvents ($m$-functions)
of selfadjoint contractions. We consider the automorphism ${\bf \Gamma}:$
$M(\lambda){\mapsto}M_{{\bf
\Gamma}}(\lambda):=\left((\lambda^2-1)M(\lambda)\right)^{-1}$ of the class
${\bf N}^0_{\mathfrak M}[-1,1]$ and construct a realization of $M_{{\bf
\Gamma}}(\lambda)$ as a compressed resolvent. The unique fixed point of
${\bf\Gamma}$ is the $m$-function of the block-operator Jacobi matrix related
to the Chebyshev polynomials of the first kind. We study a transformation
${\bf\widehat \Gamma}:$ ${\mathcal M}(\lambda)\mapsto {\mathcal
M}_{{\bf\widehat \Gamma}}(\lambda) :=-({\mathcal M}(\lambda)+\lambda
I_{\mathfrak M})^{-1}$ that maps the set of all Nevanlinna operator-valued
functions into its subset. The unique fixed point $\mathcal M_0$ of
${\bf\widehat\Gamma}$ admits a realization as the compressed resolvent of the
"free" discrete Schr\"{o}dinger operator ${\bf\widehat J}_0$ in the Hilbert
space ${\bf H}_0=\ell^2(\mathbb N_0)\bigotimes{\mathfrak M}$. We prove that
${\mathcal M}_0$ is the uniform limit on compact sets of the open upper/lower
half-plane in the operator norm topology of the iterations $\{{\mathcal
M}_{n+1}(\lambda)=-({\mathcal M}_n(\lambda)+\lambda I_\mathfrak M)^{-1}\}$ of
${\bf\widehat\Gamma}$. We show that the pair $\{{\bf H}_0,{\bf \widehat J}_0\}$
is the inductive limit of the sequence of realizations $\{\widehat{\mathfrak
H}_n,\widehat A_n\}$ of $\{{\mathcal M}_n\}$. In the scalar case $({\mathfrak
M}={\mathbb C})$, applying the algorithm of I.S.~Kac, a realization of iterates
$\{{\mathcal M}_n\}$ as $m$-functions of canonical (Hamiltonian) systems is
constructed.
