The dispute that currently troubles the Middle East most is the one between Iraq and Iran. Iraq invaded 20 months ago, but Iran's army and revolutionary guards have together virtually liberated its territory. The pressing question now, for the nearby states of the Arab Gulf as for Iraq, is whether the Iranians will keep on going when they hit the border. Iran is leaving the question open, at least for awhile.

The Gulf Arabs would be in a considerably better position to sound the alarm had they not largely accepted Iraq's invasion 20 months ago. At that time, the United States also found reason to lower its voice. It felt, and many agreed, that Iraq's incursion would help loosen Iran's grip on the hostages, as it did. But now the situation is transformed by the spectacle of a powerful, avenging Iran conducting a foreign policy of shah-like dimensions and carrying a doctrine of revolutionary Islam into the ethnically and socially unstable Gulf. To see Iraq's dictator, Saddam Hussein, humbled will not cost many Gulf Arabs sleep. To see Iran's dictator, Ayatollah Khomeini, on the march, will.

The United States has sat tight in this war, making (to Iraq's satisfaction) no distinction between aggressor and victim and hoping that a measure of stability would be restored by other hands. But now that Iran's forces are so close to the border, Washington is coming under increasing Arab pressure to abandon its stated policy of not taking sides. Egypt, for one, seeing a good post-Sinai opportunity to embrace an Arab cause, would like to pass on American arms to the faltering Iraqis, the more so that Israel (in silent partnership with Egypt's current Arab arch-rival, Syria) is helping arm Iran. Otherwise, it is argued, the Soviets, with arms ties to both sides, may emerge as an arbiter of power in the Gulf.

The United States has solid long-term reason to pursue good relations with Iran as well as with the Gulf Arabs. Getting a policy handle on the war, however, has turned out to be tricky. Earlier, the administration made a dubious gesture of favor for Iraq, still a center of international terrorism, by striking it from its official list of international terrorists so that Iraq could buy civilian airplanes. More recently, it has started buying Iranian oil for its strategic reserve--an action depicted in Washington as strategically neutral but seen in the area as an untimely tilt. Surely there are more effective ways to express American support for the integrity of both countries.