Behind the battle smoke along the Iraqi-Iranian border, Iraq is secretly developing nuclear weapons, which could add a frightenting incendiary in the midst of all those oil barrels and powder kegs.

The Defense Intelligence Agency has concluded that Iraq will become the first Arab nation to build a nuclear arsenal. The Iraqis don't have nuclear weapons that could be turned against the Iranians today, but they are expected to produce "a number" of nuclear warheads by 1985.

It's more likely these warheads would be used against Israel. An Iraqi nuclear arsenal, according to one top-secret Pentagon analysis, would have "a potential for threatening Israel," which already is "stockpiling nuclear warheads."

This could create "a classic unstable nuclear balance" in the turbulent Middle East which could lead to a nuclear exchange, warns a related document from the Pentagon's secret files.

But at least one top analyst believes Israel won't wait around for the Iraqis to produce nuclear weapons. "This most pressing problem for the United States," he writes, "is not the prospect of a nuclear conflict involving Israel and Iraq . . . but rather the prospect of a preemptive Israeli strike, with conventional weapons, against the [Iraqi] reactor."

The world can thank the French for introducing this terrifying incendiary into the Persian Gulf oil region. In order to ingratiate themselves with their oil suppliers, the French are shipping enriched, weapons-grade uranium to Iraq. All it takes to build a nuclear bomb is 20 kilos; the French have agreed to deliver 70 to 80 kilos as a beginning. They have also offered to train Iraqi personnel in nuclear technology.

Iraq already has an ugly array of Soviet-made missiles, which can be armed with nuclear warheads. A nuclear missile bombardment, of course, would devastate tiny Israel. This threat reportedly has spurred the Israeli intelligence service, Mossad, to sabotage nuclear reactors that France was building for Iraq.

Adds a top-secret DIA report: "Prudently, we must assume that Israel is considering some sort of action to forestall Iraqi acquisition of a nuclear capability, and we must consider the implications of such actions."

Footnote: The French have also agreed to supply Iraq with 100 Mirage F1 and Delta2000 warplanes, as well as warships, tanks and antitank weaponry. fIntelligence reports claim the Iraqis wish to be less dependent upon the Soviet Union for their military supplies.