WHEN PRESIDENT CARTER convened a 2 1/2-hour meeting of the National Security Council on Jan. 2, 1980, he was hardly concerned that Col. Muammar Qaddafi had convened a five-day meeting of the Libyan General People's Congress in Tripoli on the previous day.

There were pressing crises to be managed because National Security Adviser Zbigniew Brzezinski's aptly named Arc of Crisis had taken on new meaning in the last 60 days of the closing decade.

Fifty-three Americans were still hostage in Iran. The Saudi monarchy had been attacked at the Great Mosque in Mecca. The embassy in Islamabad had been sacked, leaving several dead Americans. And the Soviets had ended the decade with an invasion of Afghanistan. With America's position deteriorating around the world, there was no time for an insignificant country like Libya or the "madman" at its head.

And yet, the NSC would have done well to include a fifth item on its agenda, the trashing of the American Embassy in Tripoli the previous match. No one had been hurt and it was hardly unusual by Libyan standards, so it did not warrant high-level attention as a crisis to be managed. Nevertheless, a discussion of it would have brought into better focus the problems which were plaguing the United States . . . terrorist acts, subversion, militant Islam, and Soviet adventurism.

Let us hope this lesson will not be lost now by the Senate subcommittee that will be investigating Billy Carter's connection with Libya. That investigation must go beyond mere personalities to what Iranian militants, Saudi revolutionaries, Pakistani mobs and Soviet aggressors have long known: Libya has been systematically testing American will and finding that it can act with impunity.

Those Libyan tests have occurred all around the world. Eleven Israeli athletes assassinated at the Munich Olympics. Two American diplomats murdered in Khartoum. Thirty-two people, including 10 American children, massacred aboard a Pan Am flight at Rome Airport. Four killed and 55 wounded on a TWA plane in Athens. Armed attack on a U.S. reconnaissance plane in international air space. Forced cancellation of U.S. Navy exercises in international waters. The world's most powerful oil ministers kidnapped at an OPEC conference in Vienna. The shooting of four persons, including an American congressional aide, in Istanbul. Countless airplane hijackers. Ghoulish atrocities during years of sectarian fighting in Lebanon. Genocide in the Sahara. Uganda, and Ethiopia. Heavily armed insurgents espousing causes from Northern Ireland to the Southern Moluccas, from the Canary Islands to Nicaragua. Efforts to discredit and overthrow a score of governments from Afghanistan to Zaire.

Nor was Libyan support for terrorism and subversion to end with the decade of the Seventies. While President Carter was meeting with his military and foreign affairs advisers to develop policies aimed at reviving American influence, the General People's Congress was charting a course for the decade of the Eighties which would guarantee a Libyan-American collision.

Domestic matters were disposed of as quickly as possible, for it was "armed struggle" and "liberation movements" which most interested the delegates. The discussion focused on the question of support of Yasser Arafat's Al Fatah.

Suspicious that Arafat and the PLO were succumbing to American and European appeals for moderation, Qaddafi had tested Fatah's commitment to continuation of armed struggle. Arafat had failed that test by refusing to launch guerrilla attacks against the "traitorous Sadat's "Suez Canal and newly regained Sinai oilfields.

Therefore, Qaddafi urged that Libya break relations with Al Fatah and direct its considerable material supporters to more militant Palestinian organizations. The message would be clear, for Fatah was the largest, oldest and most influential of the various groups under the PLO umbrella.

It was entirely apparent to the delegates that the issue involved more than Palestine and Al Fatah. To be sure, Libya had provided money, arms, training and safe haven for the Palestinian armed strugglers involved in many of the most notable incidents. But Libya had also engaged in repeated attempts to overthrow and discredit Arab regimes which were "lackeys of the United States."

The "bit list" had started with King Hussein of Jordan when he attacked the Palestinian guerillas in "Black September" 1970. Morocco's King Hassan II had been added in 1971 for "pro-Americanism." Sudanese President Numeiri was targeted in 1972 for backing out of a proposed federation. President Sadat had moved to the head of the list in December 1973 by accepting his friend Henry Kissinger's step-by-step path toward peace. Tunisia's President Bourguiba also committed the sin of backing out of a merger in January 1974. Sultan Qaboos of Oman was added in 1975 for inviting Iranian troops to help him defeat the Dhofar rebels. President Barre made the list in 1977 for expelling the Soviets from the Somali bases. North Yemeni President Saleh was the target of an October 1978 attack for refusing to unify with South Yemen. And so it went year after year.

The discussion about such Libyan activities was not couched in moral terms. The Libyan people had been convinced long before that the liberation of Palestine and elimination of "traitorous stooges" involved war. And war meant casualties. The Congress had to weigh the likelihood of success against the financial, military, and political costs.

Many delegates had arrived at the Congress as skeptics. The spectacular failures to prop up Idi Amin in Uganda and Jean Claude Bokassa in the Central African Republic were fresh in most delegates' minds.

Some wondered if the embarrassment was worth it. After all, most of the foreign leaders on Libya's hit list were still in power despite repeated attempts at subversion. Nevertheless, as the Congress reviewed Libya's various ventures during the prior 10 years, skepticism turned to enthusiasm. Libya had made a very significant contribution to Islam's most spectacular accomplishment, the overthrow of the shah of Iran.

For eight years Qaddafi had provided arms, money, and training to the Mujaheddin Khalq or "Peoples Armed Strugglers." This militantly Moslem socialist group conducted numerous attacks inside Iran, especially against American personnel.

Libya also supported the leftist secular groups through their Palestinian counterparts. Most importantly, after Iraq had fallen out with Ayatollah Khomeini, Libya became his principal sponsor, coordinating its support through Abal Hassan Bani Sadr. Thus, during the critically important days of Khomeini's French exile, it was Libya which provided money, arms, and powerful transmitting facilities to carry his taped messages to the Iranian people.

For most of the delegates, this one spectacular success in overthrowing the pro-Israeli shah compensated for all of the failures and frustrations. The long effect in Iran also convinced them that time and world events were on Libya's side. With preserverance, her other targets would fall.

Money was no barrier. For 10 years, Libya had shown OPEC the way to defeat the once-invincible alliance between the international oil industry and the industrial nations. This had allowed the accumulation of $10 billion in gold and hard currency reserves as well as the investment of billions more in development.

There seemed to be no limit to the price the world would pay for oil. At the end of 1979, Libya had again taken the lead by increasing the price of $35 per barrel, a price which would earn more than $60 million per day at the scheduled production rate. That was the equivalent of $22 billion per year, $9,000 for each Libya's 2.5 million inhabitants.

Qaddafi's payment of a $10 million bonus to the Black September Organization for its successful Munich Olympics operation represented less than half of what America alone paid each day for Libyan oil. The $2 million bonus to the terrorist known as Carlos for the OPEC raid was covered by less than one hour of Libyan production.

America's dependence upon Libya for 600,000 barrels per day of low-sulphur oil also provided assurance that the United States would "turn the other cheek" to every provocation. This had been demonstrated only the previous month when America continued diplomatic relations even after the government had handed out wrecking bars and axes to attack the embassy and carted off files in Army trucks.

Moreover, Secretary of State Vance had assured the Libyan Foreign Minister of President Carter's "interest in improved relationships." Qaddafi even understood this to be promise of radical changes in American Middle Eastern policy if Carter were reelected in November.

Libya's oil revenues had also funded the acquisition of an arsenal of the most sophisticated weapons. They were principally Soviet arms, with the exception of 130 French-built Mirage fighter bombers and several hundred Italian-built Bell helicopters. Included were one squadron each of Mig 25s and Tu-22 strategic bombers, the first ever sold by the Soviet Union to a "friendly nation" outside the Warsaw Pact.

They were only the first of up to 100 Mig 25s that Russia had agreed to sell. Libya also had two squadrons of Mig 23s, missiles, over 3,000 tanks, several thousand armored personnel carriers, and six Russian submarines. With these arms came several thousand Soviet advisers and technicians as well as North Korean pilots, Czech mechanics, and Cuban instructors.

The Libyans expected the Soviet advisers to serve as a "trip wire" which would bring forth Soviet intervention in the event of attack. Although Russia had not intervened when several Soviet officers were killed during the brief Egyptian-Libyan border war in 1977, things had changed very significantly since then. Sadat had become isolated from the Arab world. Elements of the American Sixth Fleet had been diverted to the Indian Ocean. And, most important, Soviet-American detente had greatly eroded. In summary, Libya's heavy arms and Soviet alliance appeared likely to scare off Sadat and the Americans by threatening a periolous superpower confrontation.

As for the other Arabs, they too seemed cowed -- or perhaps bedazzled -- by Libya's military and financial might.

At the beginning of 1980, Libyan camps contained an estimated 7,000 foreign recruits from all over the world but especially the Middle East and Africa. Some had arrived as individuals radicalized by Libyan propaganda broadcasts whereas others arrived in units under arrangements with various liberation movements.

Most were volunteers, but there were even conscripts from Libya's foreign labor force (100,000 Egyptians, 80,000 Tunisians, and 40,000 Palestinians) who preferred military service to being shipped home to countries where they could not earn a living. Some thought they were enlisting to "liberate Palestine" only to find that they would be used against their own countries or even as a "foreign legion" for Libya's other adventures such as Uganda.

These recruits were scattered across the length and breadth of Libya in some 20 camps. The largest, capable of handling up to 5,000 men, was located 45 miles east of Benghazi near the Greek ruins of Tocra. Utilizing Palestinian, Pakistani, and Cuban instructors, it offered a six-month basic infantry course.

Farther east, at the Ras Hilal, a U-boat pen carved out of the rock for Gen. Rommel had been converted into a specialized school. There, former CIA agents and Green Berets provided training in explosive devices and underwater demolition. The largest camp in the western part of the country was located among the few remaining Italian olive and almond orchards at Tarhuna, 60 miles southeast of Tripoli. Within closer range of Libya's neighbors, there were bases for Tunisians at Zuwarah, Zawia, and the oasis of Sinawan; for Egyptians, at Baida and Tobruk; and for Saharan tribesmen, at Sebha.

"Paymaster" Qaddafi's signal was heeded. The next six months produced a dramatic upsurge in terrorism, armed insurgency, and use of Libyan-supplied weapons to defeat American goals and allies.

Only Jan 14, a newly found Egyptian guerrilla group attacked police posts in Cairo and Alexandria. After a shootout, security forces arrested some 70 members of a militant Moslem movement, calling itself Al Jihad, which had been recruited, armed, and trained for Libya's "holy war" against Sadat. Another 50 were arrested in February, but the flow of recruits across almost 1,000 miles of desert frontier quickened after Sadat granted asylum to the shah.

In April, the clandestine war was heightened a notch when Libya announced its support for a newly formed opposition front headed by a former chief-of-staff of the Egyptian army. Sadat replied by threatening to "punish" Libya. As if to show its disdain, Libya sent a team of assassins armed with SAM-7 missles to shoot down Sadat's plane en route to Washington for a meeting with President Carter. The CIA learned of the plot and Sadat's plane was rerouted to avoid refueling in the Azores where the terrorists lay in wait. By mid-June, Sadat had found it necessary to declare a state of emergency along the Libyan border in order to reimpose the martial law restrictions that had been lifted a year earlier.

On the same day in January that Egyptian security forces arrested 70 members of Al Jihad, another neighbor complained of Libyan subversion. In a thinly veiled reference to Qaddafi, Algeria's President Chanli denounced "foreign hands . . . who fish in troubled waters." The waters in determinedly secular Algeria were indeed "troubled," for militant Islamic students had sacked hotels serving alcohol, burned Algerian army brothels and, by some accounts, stoned several prostitutes to death. The reason for Libyan interference in another militant socialist state was not altogether clear, although some suspected that Algeria was too protective of Tunisia.

Less than two weeks after the shootout with Libyan-backed guerrillas in Egypt and the Algerian complaint, Qaddafi's unwanted attention shifted to a third neighbor, Tunisia. At 2 a.m. Jan. 26, some 300 heavily armed rebels launched well-coordinated attacks on police and army posts in the phosphate mining town of Gafsa, 250 miles south of Tunis. Although the raiders laid deceptive tracks to nearby Algeria, their weapons, documents, and confessions all implicated Libya.

With the aid of France, Tunisian forces recaptured Gafsa before the rebels could implement their plan to establish a government and call for Libyan aid to cost at least 50 lives and reawakened the memory of over 100 Tunisians killed by police in suppressing a general strike exactly two years earlier.

Libya's renegade behavior was also directed at France as a result of French support for Tunisia during the Gafsa insurrection. Responding to government-sanctioned charges that France had sent paratroopers "to make Tunisia a protectorate again," mobs sacked and burned the French embassy in Tripoli and the consulate in Benghazi on Feb. 4. It was a repeat of the December 1979 destruction of the American embassy in Tripoli and a warning of what was to come to the British embassy the following June.

At the beginning of March, a massive infusion of trained men and heavy arms from Libya helped the Algerian-backed Polisario Front to inflict some 2,000 casualties on the Moroccan army. It was a major victory in the struggle to liberate the Spanish Sahara and provided Polisario with a credible basis for proclaiming a so-called "Saharan Arab Democratic Republic." Libya recognized the erstwhile new "state" on April 17, thereby rupturing relations with Morocco which had been severely strained by years of subversion.

On March 9, 30 Filipino civilians were killed and 257 wounded when members of the Moro National Liberation Front threw grenades into several crowded movie theaters and concerts on the island of Mindinao. These were only the most recent incidents in a bloody 10-year rebellion which has caused an estimated 10,000 deaths. Representing about 10 percent of Filipinos, the Moslem Moros have long enjoyed Libyan military and financial support in their quest for autonomy. In fact, the political leader of the Moro National Liberation Front makes his headquarters in Tripoli and Moro forces are trained in the Libyan military camps.

At the end of March, some 1,500 armed Sahara tribesmen left their Libyan bases to resume the civil war in Chad, the fourth of Libya's neighbors to face insurgency in just three months. Libya also threatened to send regular army troops. The civil war had begun in the mid-1960s as a series of sectarian massacres between Moslem Arab tribesmen of the northern desert and Christian or animist blacks from the south.

But Qaddafi's interest in assuring a friendly government in Chad had been motivated by strategic rather than religious considerations. First, he wanted to eliminate the potential threat posed by a French paratroop battalion and base at Ndjamena. Second, he wanted to establish a beachhead to spread Libyan influence within and across Saharan Africa. Finally -- and perhaps most importantly -- he wanted continuing concurrence in Libya's 1973 occupation of 37,000 square miles of Chad in the Aouzou Strip running along their frontier. Its uranium potential played an important role in Libya's efforts to acquire atomic weapons from Pakistan.

During the spring of 1980, Libyan-supplied arms were also being employed in the strategically vital Horn of Africa. In the course of escalated fighting for control of the Ogaden region, Ethiopian Mig 23s bombed several villages well inside Somalia. They also shot down over the Sudan several Egyptian fighters which Sadat had sent to help Numeiri in his efforts to aid the Eritrean Liberation Front.

Although the Migs carried the green, yellow, and red markings of the Ethiopian Air Force, they were flown by Cubans and paid for by Libya. They, and quantities of other arms, were the product of an unusual March 1977 agreement between Fidel Castro and Qaddafi to support Ethiopia's new Marxist leaders. On the other side, the Somali and Eritrean Liberation Fronts were aided by Egyptian military personnel and used American arms provided by Saudi Arabia. Whether accurately or not, these confrontations were seen in the area to be a battle between the "surrogates" of the competing superpowers.

The first six months of 1980 were also marked by a more clandestine form of warfare. Nine exiled opponents of Qaddafi were assassinated in Britian, Italy, West Germany, Greece and Lebanon. Their murders were clearly related to Qaddafi's explicit threat to "liquidate" all opponents and to the efforts of Libyan embassy personnel to intimidate exiles. As a result of those activities, the United States expelled six Libyans on the diplomatic list and withdrew the last two American diplomats from Tripoli. In retaliation, Qaddafi arrested two American oil company employes who had taken photos near the port and expelled another 25.

It was the same, month after month, week after week, as Libya extended her contact with extreme revolutionary movements all around the world. In March, Qaddafi received self-styled Ayatollah Sadegh Khalkhali on an official visit to Libya. Best known for having ordered the execution of more than 300 Iranians and for having treated the remains of the American commandos in barbaric fashion, Khalkhali was the epitome of hardline opposition to the release of the American hostages.

At the beginning of April, the revolutionary commander of the Nicaraguan army visited Tripoli on his way home from Moscow. Although the results of that visit were not publicized, Libya is known to have provided arms and training to the anti-Somoza forces prior to his overthrow. In the immediate aftermath of the especially grisly execution of President Tolbert and other Liberian leaders at the end of April, Qaddafi sent a special emissary to offer arms and money in an effort to enlist the new strongman, Sgt. Samuel K. Doe, to Libya's revolutionary policies.

Although Libya is clearly identified with assassination, insurrection, and support for the most revoluntionary governments, it would be a mistake to measure success solely in toppled regimes. Libya's goals are also achieved when other nations, groups, or individuals emulate its tactics; when the Free World alliance is split over the most appropriate response; when Arab terrorists alienate American public opinion; when the United States is forced to increase its identification with an inherently shaky regime; and when previously pro-American governments bend in order to survive.

By offering the carrot of financial aid and the stick of subversion, Libya has encouraged some moderate regimes to distance themselves from the United States or to raise their price for cooperation. This is nowhere more apparent than in the reception afforded to American policy initiatives during the first six months of 1980.

Like the American people, the participants in the National Security Council meeting on Jan. 2nd had come belatedly to recognize that the nation's most pressing interest was in assuring that world oil supplies would be adequate, affordable, and uninterrupted. Superpower rivalries, Free World alliances, and Third World relations all hinged on the flow of oil from the Persian Gulf, especially Saudi Arabia.

Therefore, the policy advisers used the meeting to develop the outlines of an assertive new policy for the 1980s, one which would stabilize the region and the Saudi monarchy. As that policy unfolded over the next six months, the president and his advisers would have cause to realize that they should have given attention to the spark as well as to the blaze. Libyan activities helped to frustrate many of the policy initiatives and to render others more costly in terms of political and financial commitment.

Jan. 4, President Carter announced America's first foreign initiative of the new decade. He urged the world to join the United States in isolating and punishing the Soviet Union for invading Afghanistan. Taking up this call, Saudi Arabia and America's other Moslem allies convened a special conference of Islamic foreign ministers at the end of January. Saudi Arabia's Princeton-educated Prince Saud al-Faisal urged that the Moslem states break diplomatic relations with Moscow and take other stern measures.

But the Soviet Union also had champions. Libya and the PLO used obstructionist tactics to broaden the agenda to include discussion of Palestine, the Camp David agreements, and American pressure on Iran -- issues which could be counted on to elicit criticism of the United States. As a result, the resolutions finally passed by the conference involved a "plague on both houses," thereby avoiding isolation of Libya's Soviet allies.

This unsatisfactory response to President Carter's invocation of the Afghan apocalypse became even weaker when the foreign ministers met again in May for their regular annual meeting. This time Libya and the PLO were joined by Syria in pushing through a resolution which effectively recognized Soviet control over Afghanistan. This faint-heartedness by the Moslem states also provided an excuse for European nations to avoid the American call for a boycott of the Moscow Olympics. Thus ended the first American foreign policy initiative of the new decade.

By his own account, President Carter's prinicipal objective since the previous November had been the prompt and honorable release of the Tehran hostages. This goal was also frustrated by maneuvering at the January conference of Islamic foreign ministers. Iran, supported by Libya and other hardliners, obtained a resolution condemning use of force or economic pressure to free the hostages. Although Qaddafi paid lip-service to opposing the hostage seizure, he was far more concerned about avoiding a precedent for joint consumer economic pressure against oil producers.

Therefore, he went so far as to urge retaliatory oil cut-offs, trade boycotts, and asset withdrawals in the event of concerted consumer action. These threats never required formal consideration because the Europeans and Japanese got the message and refused to support meaningful economic pressure. The abortive commando raid in April prompted a Libyan call for removal of U.N. headquarters from New York and strong support for the resolution of the May foreign ministers conference condemning "American military aggression in Iran."

The third American initiative of the 1980s was contained in President Carter's State of the Union message on Jan 23. It established a so-called "Carter doctrine" which would provide for the military defense of the Persian Gulf. Its credibility depended upon obtaining American basing privileges within or near the region. Pentagon planners identified Omani bases at the mouth of the Persian Gulf and Somali bases at the entrance to the Red Sea as the most important. Unfortunately, Libya worked in concert with the Soviet Union and Cuba in an effort to block American access to those bases.

Pressure was brought on Somalia through support for Ethiopia's battle to avoid Somali annexation of the Ogaden region. By early 1980, the battle had sharpened Somalian strongman Barre's desire for heavy arms while burdening his desperately poor country with 1.2 million refugees. To meet these requirements, he demanded massive American military and financial assistance in exchange for access to the excellent facilities which the Soviets had built prior to their expulsion in 1977.

The United States was reluctant to pay the financial and political price of supporting an expansionist Somali war which was unpopular with other African countries. Moveover, support for the erratic Barre raised the risk that the superpowers would be dragged into a "surrogate" conflict, for Ethiopian supremacy in the air gave credibility to Ethiopian strongman Mengistu's threat to bomb any Somalian bases made avilable to the United States. The American negotiators had better success in Oman, reaching substantial agreement by the end of May. But this success seemed certain to revive the insurgency which had occupied Omani, Iranian, British, and conservative Arab allies for many years. At that time, 1975, Qaddafi's principal deputy, Maj. Abdulsalam Jallud, had issued an ultimatum that Libya would turn Oman into "another Vietnam" unless all foreign forces were withdrawn.

Libya proceeded to supply sophisticated arms to the Dhofari rebels in the so-called "Popular Front for the Liberation of Oman" which operated out of South Yeman. The insurgency only ended when the Aden government, preoccupied with Yemeni politics, suspended its backing in exchange for Saudi recognition. Both the Yemenis and the Libyans would like nothing more than to take another crack at Sadat's only Arab ally, Sultan Qaboos.

Libya's ability to impede America's military role in the Middle East is not limited to actions on the Arabian peninsula or the Horn of Africa. In March, Malta and Libya signed a bilateral defense and economic cooperation agreement which rewarded Prime Minister Mintoff for expelling the British navy a year earlier. With Qaddafi at Mintoff's side and 500 Libyans parading through the streets of Valetta waving Qaddafi's Green Book, the Union Jack had been struck after 180 years.

Those bases had played a critical role in NATO's domination of the Eastern Mediterranean, but Qaddafi had seen them as a threat to Libya. Accordingly, he had purchased their elimination with oil and financial assistance.

American bases at Clark Field and Subic Bay in the Phillippines are also essential to the maintenance of American forces in the Indian Ocean. Although the Libyan-backed Moro insurgency poses no real military threat to the Philippine government, it creates a financial drain by occupying some 100,000 government troops. It also adds to politcal tension by providing an excuse for continuing martial law. If those pressures were to produce a radical change of government, American bases would become exceedingly vulnerable.

This dismal saga is worthy of our attention only if it can help us to avoid repeating our mistakes . . . or, if it is too late for that, at least help us to cope better with their consequences. There are three fundamental areas in which the story of Libyan-American relations is instructive.

First, we need to understand the forces which caused the Libyan revolution. Then we must conduct a painful appraisal of the situation in other nations important to our strategic and energy interest. Saudi Arabia, Kuwait, the Emirates and Oman leap to mind. If we find that similar forces are at work, we must face the dilemma of whether to sacrifice real short-term interests obtainable through propping up shaky regimes, against possible long-term interests obtainable by establishing a more firm foundation. It may well be that there is no realistic prospect for avoiding violent -- or at least dramatic -- change, but if that is the case, we need to appreciate the prospects.

Second, we must determine whether we can reasonably expect violent or dramatic change to produce a government with which we can establish an acceptable relationship. Is it possible that our basic dilemma makes it inevitable that the replacements will be Qaddafis or Khomeinis? If so, we must weigh our options. We are likely to find that military intervention is not a realistic alternative because of potentially hostage American employes and oil interests.

In that case, we must start right now to make those difficult decisions about domestic energy development. The risk of acid rain, ozone dispersal, desert disruption and low-level radiation may look different weighed against thermonuclear war or deprivation. We must recognize, of course, that reduction of our oil dependence will require time.

Finally, we need to examine the Libyan situation to determine how best to "buy time" to develop domestic alternatives. Since no nation's policy -- including French appeasement -- has been notably successful in Libya, we can at least establish what not to try.

Above all, we must learn that we will not buy time by prevaricating, appearing weak, or promising future concessions which we are not likely to deliver. If we try these tactics instead of firmness and fairness; we can count on Qaddafi's righteous wrath. This is the reason why the White House must entrust American-Libyan relations to the professionals rather than contribute to the appearance of "back channel" communications by rank amateurs.