Syria and Iran are moving warily and hesitantly toward a confrontation in the strategic and perilous Bekaa Valley of eastern Lebanon. Our associate Barbara Newman has just returned from there with an eyewitness account of what is happening.

This is outlaw country -- populated by sullen Lebanese farmers and villagers, patrolled by rugged Syrian commandos -- where terrorists run free.

Across the valley stretches the dark, inhibiting shadow of Iran's Ayatollah Ruhollah Khomeini. By intimidation and histrionics, his mullahs have transformed the area into an Islamic state, a nation within a nation, that has the look of a little Iran. Their authority is backed by an invisible force of armed fanatics.

Here's how it happened: In 1979, the obstreperous ayatollah took advantage of the mounting bedlam in Lebanon to attempt a theocratic takeover. He sent hundreds of revolutionary guards into the Bekaa Valley to recruit and train terrorists. They established a terrorist base in the city of Baalbek, on the valley's edge.

Khomeini also took advantage of Iran's close alliance with Syria to maintain access to the Bekaa Valley. First, the revolutionary guards poured into the valley through the Damascus airport. They were followed by a procession of Iranian mullahs, officials and couriers who rallied the fragmented Shiite Moslem community and brought leadership and unity to this chaotic corner of Lebanon.

The wily Khomeini also routed a steady flow of cash and arms through the Damascus airport. Thus he was permitted to arm the terrorists and pay them salaries. He used some of the money to buy the loyalty of the Shiite farmers and villagers, paying bribes and providing social services. All the while, his mullahs indoctrinated the people with Khomeini's fanatical, fundamentalist doctrines.

Suddenly Syria was confronted with a fundamentalist Islamic regime, loyal to Khomeini, in the middle of its sphere of influence -- a potentially hostile regime that had been created right under its nose. Syrian sources confessed to Newman that the ayatollah skillfully used diplomacy and oil shipments to placate them. His task was easier because both countries shared a common hatred for Iraq.

As his fanatical following grew, Khomeini began to use the terrorist threat as a counterforce against the established Syrian regime. Khomeini has a history of turning against his benefactors. He is now waging war against the Iraqis and inciting terrorism against the French; yet both gave him shelter while he was plotting against the shah.

So the Syrians began to crack down, halting the flow of arms and money through the Damascus airport and blocking visits of Iranian leaders and couriers. But they stopped short of a military confrontation. They continue to man the checkpoints and restrict terrorist operations in the Bekaa Valley. But they don't interfere directly with the Islamic regime that the ayatollah has established there. A Syrian official explained to Newman that an attack upon the terrorist stronghold would only result in the slaughter of the hostages thought to be held in Baalbek.