As the Iran-Iraq war continues into its eighth year of carnage with no end in sight, the West's shameful role has been to supply arms to both sides. While piously professing dismay over the slaughter, the United States and its allies have been quietly selling the Iraqis and Iranians the military hardware with which they're killing each other. Among the arms traffic: a planned sale last year of 12 military transport planes to Iran by a West German firm.

The arms sales to Iran -- an outlaw regime that encourages terrorism throughout the region -- are particularly disgraceful. We've reported earlier on the sleazy deals France made with Iran: secretly shipping thousands of artillery shells to Tehran and withdrawing asylum from the Ayatollah Khomeini's most effective enemy, Massoud Rajavi -- all in the hope of winning freedom for French hostages. The kowtowing didn't work.

France has also sold weapons to another terrorist protector, Libya's Moammar Gadhafi, and to Syria. The French are not alone in this obscene traffic: Italy, Israel, Austria, Greece and Sweden have all kept their cash registers ringing with arms sales to these brutal dictatorships.

As we reported in August 1986, they sold Iran four Type 209 diesel submarines, which even now could be threatening the U.S. Navy in the Persian Gulf.

Now we've learned of a secret deal by a German company to sell 12 transport aircraft to Iran. Several documents detailing that transaction were spirited out of Iran by members of the anti-Khomeini People's Mojahedin, who slipped them to us. The documents are photocopies of original correspondence in English.

The first document is dated July 7, 1985, and is addressed to Ali Akbar Hashemi Rafsanjani, the speaker of the Iranian parliament.

The two-page letter was from the international sales director of the West German firm MBB (Messerschmitt-Boelkow-Blohm). The company was founded by Willi Messerschmitt, designer of the World War II Nazi fighter plane, the ME-109. Though the family still has a minor role in MBB, it is owned mainly by West German state governments.

''It is our pleasure to have the opportunity to bring to your kind attention some more details of the TRAN(S)ALL C-160 program,'' the letter begins. ''MBB has been in the past on several occasions in Tehran to present the aircraft and its conversion options and operational equipment {to Iranian military forces}.''

The sales manager boasted that the C-160 ''is the most economical heavy tactical transport aircraft today being operated by the German, French and Turkish air forces in large numbers within NATO.'' He added: ''A significant amount of TRANSALLS {are} operating in Southeast Asia and Africa from unprepared remote airstrips. In comparison with the Hercules C-130, the TRANSALL C-160 has several advantages, such as lower operating cost, easy maintenance and guaranteed logistic support.''

The next document is dated December 1985, and is a ''Memorandum of Understanding'' outlining the sales proposal for 12 C-160s at $17 million per plane.

More than just the planes themselves was to be included in the deal. MBB offered to help the Iranians set up a maintenance base, and agreed to discuss a licensing and coproduction arrangement to be worked out later.

The follow-up part of the proposal was titled ''Technology and Know-How Transfer,'' which was to comprise ''all assistance as will be necessary for a modern aircraft industry.'' This included parts and machinery, plus training and supervision of Iranian personnel to produce the aircraft (which is powered by British-made Rolls-Royce engines).

A spokesman for the West German Embassy here told our reporter Frank Byrt that MBB had asked the Bonn government in 1985 whether it could sell C-160s to Iran. MBB was told ''it is out of the question as long as the state of war exists,'' the embassy official said, adding: ''Ever since then, there has been no contact between MBB and the federal government'' about the matter.

But the documents make clear that MBB continued to deal with the Iranians. Telexes in February 1986 prodded Tehran to reach a decision. A wire on Feb. 25 from the company's international sales director, Helmar Stellner, said, ''To safeguard delivery time, prices and conditions, please let me know before the end of February 1986.''

Tehran missed that deadline, but finally, on March 19, 1986, MBB and the Iranian defense ministry reached agreement. The letter of intent, with details to be worked out later, was signed by the board chairman and director of the Iranian Defense Industries and by Stellner and MBB's chief legal officer, Winfried Remus.

Our sources have been unable to confirm whether the planes and other material were actually delivered to Iran. Our attempts to reach MBB's North American representative were unsuccessful.

Correction: In our column of Sunday, Oct. 4, we reported incorrectly that Greg Rodriquez, an American prisoner of war held by the Japanese in World War II, had died. Also, the name of the late Dr. Murray Sanders, taken from congressional testimony, was misspelled.