TO MEET the international clamor over the wartime record of its president, Kurt Waldheim, the Austrian government constituted a panel of military historians -- an American, an Israeli, four Europeans -- to conduct a supposedly dispositive inquiry. The panel has now reported. It says it found no evidence that President Waldheim was personally guilty of war crimes, but it did conclude that he knew of and ''repeatedly went along'' with terrible atrocities by the German army unit in which he served ''and thereby made it easier for them to be carried out,'' and it noted that he had concealed his military duty and knowledge of atrocities for years afterward.

Outside Austria anyway, the report will be widely taken as confirming the view that there is no acceptable basis on which Kurt Waldheim could remain the president of a democratic country. For he was not simply an average man caught in awful circumstances. He was someone who, the new report says, did not offer the opposition that some other officers in his position offered at the time, and offered without punishment; he then lied about his military service and covered it up. No one familiar with the ways of Kurt Waldheim, however, could have been surprised by his response to the report. He pronounced himself ''happy'' that a statement had been made that he had not been shown to be guilty of war crimes -- ''that knowledge is not a crime.'' Asked whether he should resign, he said: ''I see my duty as putting all my knowledge and experience at the service of my country.''

His notion of duty is entirely consistent with his demonstrated capacity for moral reflection. But what the many foreign friends of Austria have been struggling with in their minds over the several years of the Waldheim affair is something else, something harder to deal with. People have been prepared to make a judgment on the man. They have been reluctant to make a judgment on the Austrian people. It seemed unfair, uncalled for. Yet the fact is that the reason this whole affair arises is that the Austrian people put Kurt Waldheim in the high place where he now is, and that they keep him there. Thus it becomes more painful, but unavoidable, to contemplate how it is that he enjoys partisans and defenders to this day and stays on as his country's head of state. The new report sharpens this dark question.