In the continuing uproar over Israel's pre-emptive air strike against the Iraqui nuclear plant, Israel's critics -- including some in the Reagan administration -- have made much of the fact that Iraq is a signatory to the Nuclear Non-proliferation Treaty. The implication is that its Osirak facility could not have been intended for military use.

What this argument conveniently overlooks is that the Non-proliferation Treaty is toothless. Far from putting a damper on the treaty has served as a cover under which any non-nuclear nation can obtain the materials and technological equipment it needs a build a bomb. In short, the treaty has encouraged the spread of nuclear technology.

The treaty's provisions require signatory nations that have the know-how to sell nuclear tools on demand to any other nation that has signed the treaty and has pledged not to build a bomb. Then, when the new member of the nuclear "club" has attained the capability to produce peaceful nuclear energy -- and decides it wants to expand into military production -- all it needs to do is give 90 days' notice and withdraw from the treaty. It can then use the technology it obtained under the treaty to make nuclear weapons without any hindrance from the treaty organization.

But even while a nation is still bound by the treaty, and thus is supposedly being restrained from developing a unclear arsenal, there is a crucial loophole: the highly publicized international "inspections" cover only the technological equipment and material imported under the treaty, not any development the signatory nation may be doing on its own.

Iraq is the perfect example of what's wrong with the treaty. On the face of it, the idea that a country wallowing in oil would spend hundreds of millions of dollars to develop nuclear energy is absurd. The Iraquis, of course, haven't said that their reactors were supposed to produce electricity; they were to be merely "research" facilities. But if they weren't to be power plants -- which Iraq doesn't need -- and they weren't for weapons production, what on earth were the reactors intended to be? Toys?

Yet despite this absurdity, Iraq is a member in good standing of the non-proliferation community.

Israel, on the other hand, never signed the Non-proliferation Treaty. To the defenders of the treaty, this circumstance tends to make the Israelis the bad guys and the Iraquis the innocent victims.

This, of course, is nonsense. One may disagree with the necessity, the wisdom and the politically suspicious timing of the Israeli raid on Iraq, but there is no way Iraq can play a convincing role of well-meaning innocence.

Iraq used its position as a major oil producer and a wealthy importer of arms to flout the intent of the treaty while staying strictly within its technical limitations. It used a diversity of sources to get the nuclear technology it wanted, putting pressure on various supplier nations.

In 1975, Iraq persuaded France to become its primary source of nuclear technology. France -- which, incidentally, is not a treaty signatory -- had compelling reasons for agreeing. It needed Iraqi oil and the money it would realize by selling Iraq a nuclear plant. France also agreed to supply Iraq with enriched uranium and to provide training to Iraqi technicians.

The Iraqis then turned to Italy, which was also thirsty for petroleum and foreign contracts. Still adhering strictly to the treaty, Iraq signed a deal with Italy involving exchange of scientists and information on nuclear fuel technology -- particularly the production of plutonium, the key ingredient of nuclear bombs.

The Iraqis next moved to stockpile uranium. They found a willing supplier in Portugal, which got 40 percent of its oil from Iraq. Officials charged with enforcing the Non-proliferation Treaty never raised the question of why a country with no nuclear reactors needed to stockpile uranium. The reason is that it was officially none of their business. The treaty sets no limit on the amount of uranium a signatory nation can buy.

Through all these years of Iraq's persistent acquisition of nuclear capability, sources told my associates Lucette Lagnado; and Howard Rosenberg, the United States tried to persuade supplier nations not to help the Iraqis. Intelligence agencies have warned repeatedly that Iraq was aiming for military nuclear capability. And despite lip-service to the Non-proliferation Treaty, neither the White House nor Congress puts much faith in its effectiveness.