NICOSIA, CYPRUS, DEC. 26 -- Iran's spiritual leader today rejected the latest concessions of author Salman Rushdie, saying his death sentence for offending Moslems remains in effect.

Rushdie issued a statement in London on Monday embracing Islam. It stated that the author would not seek the printing of a paperback edition of his novel "The Satanic Verses" and would not allow its translation into any more languages.

The late Ayatollah Ruhollah Khomeini, Iran's leader, called for Rushdie's death in February 1989 for allegedly defaming Islam in his book.

In a statement carried by Tehran radio, Iran's spiritual leader, Ayatollah Ali Khamenei, said today the death sentence still stands.

"God willing, from now on no one will dare insult the great messenger of God and Islamic sanctities," Khamenei said in the statement monitored in Nicosia.

He said Rushdie's contention that he had not meant to cause offense would do him no good.

Quoting Khomeini, he said that "even if he {Rushdie} repents and becomes the most pious Muslim on earth, there will be no change in this divine decree."

"The Satanic Verses" has sold 1 million copies. It has been translated into 15 languages.

The radical daily newspaper Jomhuri Islami stressed that the death sentence is irrevocable, and it called on Rushdie to prepare to die.

"If Rushdie's repentance and his return to Islam are seen as a sign of his bravery, naturally it is necessary that he show greater bravery and prepare himself for death," the Farsi-language newspaper said today.

"He will die anyway, but he will be better off to choose his way to eternal salvation courageously before a son of Islam fires the coup de grace," it added.

The editorial was reported by Iran's official Islamic Republic News Agency and monitored in Cyprus.

Rushdie has been in hiding since Khomeini called for his death, and Tehran put a $1 million bounty on his head.

Iran cut diplomatic ties with Britain over the Rushdie affair. The ties were restored Sept. 27 after British officials publicly conceded the book had offended Moslems and said the government had no wish to do so.

Khamenei said today that Rushdie's statement demonstrated that "Western arrogance has been forced to retreat step by step."

He added that "the edict, and the commitment of Moslems around the world to implement it, is showing its first results."

Iranian President Hashemi Rafsanjani, who has attempted gradually to rebuild Iran's ties with the West, has not rescinded the death edict. But his supporters have indicated they are willing to let the decree lapse.