JIMMY CARTER is sinking his teeth into another diplomatic dispute, this time over Transylvania.
Romanian politicians and leaders of the country's minority Hungarian community met at the Carter center in Atlanta this week to diffuse ethnic tensions threatening to derail Romania's and neighboring Hungary's drive for acceptance into the European Union.
Just like most of his other interventions, the attempt by Carter and the US-based Project for Ethnic Relations to calm worsening relations between Romanians and the Hungarian minority has a larger purpose: to help troubled Eastern European nations resolve age-old disputes that are keeping them from peace and EU membership.
But Romanian politicians -- alienated by increasingly strident calls by the Hungarian's minority for self-government -- say Mr. Carter is playing right into their hands.
''I think it's a great coup for the Hungarians,'' says Ion Ratiu, a member of the opposition Christian Democratic Peasant's party. ''I think they're trying to escalate the problem and attract the attention of the world to it.''
Romanian officials say the controversy has arrived at a crucial time for them and neighboring Hungary. The two countries must sign a usually routine bilateral political treaty before March 21 to advance to the next stage of applying for entrance to the European Union, but the Hungarian minority issue has stalled negotiations.
''If the problem of relations with the Hungarians isn't solved rapidly,'' warns Mircea Ciumara, an economist and opposition member of parliament, ''it will slow or even stop the integration of Romania into the European Union during a critical period of stabilizing the economy.''Western diplomats and opposition party members caution that with elections scheduled for next year, a handful of politicians on both sides are escalating the dispute for political reasons.
Diplomats are concerned that the current flare-up could become another blow to a country eager to join the EU and NATO, but has seen its reputation and foreign investment suffer following intense media coverage of infamous Romanian orphanages and baby sales.
''It's time for them to tone down the rhetoric,'' said a Western diplomat. ''It's not something I think the majority of the people believe.''
Observers were alarmed by the formal inclusion of three Romanian nationalist parties in President Ion Iliescu's coalition government last month. The Hungarian minority's subsequent formation of a regional council of mayors in late January has only exacerbated tensions.
The problem, diplomats say, is nationalist politicians on both sides.
Seated at his desk in headquarters of the Greater Romania Party, nationalist Mircea Hamza says ethnic Hungarian requests for Hungarian language-only schools and increased self-government are the first steps toward secession. Their goal is to return Transylvania -- a vast region that makes up nearly half of Romania -- to Hungary, which it was part of until the end of World War I.
''There is this Hungarian dream of a return to a greater Hungary,'' says Hamza, who has a large bust of Avram Iancu, a Romanian who led a revolt against Transylvania's Austro-Hungarian rulers in 1848, on his desk. ''The government in Hungary is encouraging the actions of the Hungarian minority.''
Hungarian government officials dismiss Hamza's and other nationalists' allegations as absurd. ''For Hungary, [the World War II] borders are not an issue at all,'' says Andras Karoly Ivan, spokesman for the Hungarian government's office for Hungarian minorities abroad. ''The Hungarian government would like to sign basic treaties with Romania plus separate agreements protecting minority rights by [the EU deadline].''
Leaders of Romania's ethnic Hungarian community, which make up 8 percent of Romania's 23 million people and are concentrated near the Hungarian border, say their requests for autonomy are being twisted.
''With the average people there is very little tension between Romanians and Hungarians,'' says Anton Niculescu, political adviser for the Hungarian Democratic Union. ''You can see [the controversy] has all been created by the media.''
But Western officials say that leaders of the Hungarian movement have also been guilty of provocations.
Earlier this month, leaders of the ethnic Hungarian minority and Hungary's ambassador to Romania attended a ceremony here that included the flying of a Hungarian flag and singing of the Hungarian national anthem. In January, Hungarian Prime Minister Gyula Horn snubbed a top Romanian official by refusing to meet him because of the dispute.
Diplomats warn that the openly anti-Semitic and ''borderline fascist'' Greater Romania Party and other nationalist parties -- which have little popular support -- can wreak political havoc in such a tense atmosphere.
Pointing to the 1928 map of Romania on his wall, Hamza explained how the former Soviet Republic of Moldova and several parts of the Ukraine and Bulgaria lost in World War II should be returned to Romania. He then went on to praise Marshall Ion Antonescu, Romania's pro-Nazi, World War II-era leader whose regime killed more than 400,000 Jews and Gypsies.
''Antonescu did very good things. He saved thousands and thousands of Jews. In Romania, none of the Jews were sent to concentration camps in Hungary and Germany,'' Hamza says. ''I think there were isolated cases in which Gypsies were killed.''
Diplomats say they are alarmed by signs of the rehabilitation of Antonescu. In December, a new state-funded, pro-Antonescu documentary was shown in movie theaters and streets have been given his name in some cities outside Bucharest.
''The rehabilitation of Antonescu is something that's of concern,'' said one Western diplomat. ''It's not clear cut, but it appears to have some official sanctions.''
But Bucharest residents uniformly dismissed the talk of fascism and tensions with Hungary as political opportunism. Several said they were too busy trying to survive Romania's slow and troubled transition to a market economy and dismissed the dispute as political opportunism.
''I've lived in a town where half were Romanians and half were Hungarians and there were no problems,'' said Galina Urs, a Russian who has live in Romania for the last 40 years. ''This is an artificial problem the politicians on both sides have created to increase political capital.''
Diplomats say a failure of Hungary and Romania to sign the political treaty before the March 21 deadline is a bellwether of how serious the problem may be. So far, little progress is being made.
''The gap between the minimum the Hungarian government will accept,'' says the Western diplomat, ''and what the Romanian nationalists will accept is still substantial.''