THE growing confrontation over Salman Rushdie's controversial book has sharply reversed - at least for now - the warming trend between Iran and the West. The row has already led to a tit-for-tat withdrawal of diplomats by both Iran and a number of European countries. The dispute could also disrupt economic and trade relations if not contained.
But beyond these immediate repercussions, Mideast experts here see a number of broader implications:
The chances of freedom for the Western hostages held by pro-Iranian groups in Lebanon have diminished.
Infighting in the divided Iranian leadership is apt to intensify, and those favoring improved relations with the West have been weakened.
Iraq, which portrays itself as a vital defense against Islamic fundamentalism in the Middle East, could gain favor with the West.
Western attempts to enlist Iranian help in the emergence of a moderate regime in Afghanistan may be less successful.
Whether the deterioration of relations between Iran and Western Europe is temporary or lasting depends largely on what happens inside Iran, analysts say.
``I don't think there's anything the Western nations can do in the short run to influence Iranian policy,'' said Fred Halliday of the London School of Economics. Professor Halliday said that Ayatollah Ruhollah Khomeini, Iran's spiritual leader, ``wants to show that Iran, although it's been frustrated in the war with Iraq, can still stand up to the outside world.''
Ayatollah Khomeini asserted his leadership as defender of the Islamic faith by issuing a death decree on British author Rushdie and his publishers in Britain and the United States for the book ``The Satanic Verses.'' Muslims say the book, which has become a bestseller in Britain and the US, blasphemes their religion and the prophet Muhammad. The book has provoked demonstrations among the large Shiite Muslim communities in Britain, Pakistan and India as well as Iran. It has been banned in many Islamic countries.
Publishers in France, Italy, West Germany, Greece, and Turkey have canceled or postponed plans to print the book, and agents in Japan and the US have suspended distribution until the furor subsides.
The diplomatic row is the worst breach in Iran's relations with the West since the 1979 revolution and the ensuing US hostage crisis.
A return to isolation for Iran would be a setback for those Iranian leaders who have been seeking rapprochement with the West both to enhance Iran's political influence and to repair its battered economy after an eight-year war with Iraq.
The British foreign minister, Sir Geoffrey Howe, expressed the common view of EC ministers that ``If Iran wishes to have normal relations with the rest of the world, it won't be possible as long as there is a continuance of this kind of threat.'' But Iranian Prime Minister Mir Hossein Musavi said that it was the ``Western countries which need to win Iran's favor rather than the other way around,'' according to the official Iranian news agency.
Until Tehran Radio broadcast a worldwide incitement to kill Rushdie and his publishers, Iran's relations with Europe had been making steady progress. Britain reopened its embassy several months ago, and British businessmen were planning to return to Tehran for a trade exhibition next month. Other European businessmen also hoped to profit from the cease-fire in the Iran-Iraq war, and the assurances that the country was again safe for foreign travelers.
Iran's most important trading partner in Europe, West Germany, has maintained active relations with Tehran since the revolution. So it was a severe blow to Tehran that West Germany was a leading advocate of a tough and concerted response from the EC.
Bonn government sources say that the Rusdie affair is undermining West Germany's bid for better economic ties with Iran, according to wire reports.
One possible consequence of Khomeini's attempt to apply his revolutionary doctrine to Iran's foreign relations could be a shift in world opinion toward Iraq in its self-proclaimed role of containing Islamic fundamentalism in its costly war with Iran.
``This now will strengthen Iraq's hand even more because Iraq has claimed all along that it is defending not only the Arab world but Western civilization against these fundamentalists,'' said Heino Kopietz of the Institute of International Strategic Studies.
Criticizing the EC decision to withdraw diplomats as ``a big mistake,'' the speaker of the Iranian Parliament, Hashemi Rafsanjani, said that ``The Satanic Verses,'' was a conspiracy by the West against Islam, according to the official Islamic Republic News Agency.
``We do not fear such threats,'' Mr. Rafsanjani said, according to the news agency. ``We are prepared to follow our own path at any cost.
Rafsanjani has been a leading proponent of restoring normal relations with the West, and the dispute has been a serious setback for him. Dr. Kopietz said that Rafsanjani's remarks can be interpreted as a message to Europeans that he has been forced to endorse Khomeini's defense of Islam, since it is almost impossible for him to compromise on the religious issues raised by Rushdie's book.
One exception to the West's condemnation of Khomeini's death threat has been New Zealand, where Prime Minister David Lange has said that preserving trade ties took precedence over concern about a book published in Britain.
Rushdie remains in hiding under full-time police protection. There are some 2 million Muslims in Britain and an additional 3 to 4 million in Western Europe.