YUGOSLAVIA, the state Woodrow Wilson assembled out of the fragmented Balkans after World War I, may not be ''Balkanizing'' all the way back into separate nations, but it is certainly coming under ever sharper strain. In the northwestern, formerly Austro-Hungarian republics, local nationalism has taken a democratic form and produced elected non-Communist governments in both Slovenia and Croatia. This is welcome, but it's not that enlightenment is the only current running there. Enough freedom has arrived finally to permit public airing of the mass score-settling killings committed by Communist resistance Partisans as World War II ended; the victims included large numbers of the Croatian Ustashi fascist movement. These revived memories of Communist and ethnic terror are bound to weigh heavily on the progress of the new democratic movements.

In the southern and eastern, formerly Turkish-ruled parts of Yugoslavia, nationalism has taken a darker turn, especially in the dominant republic of Serbia. The party chief, Slobodan Milosevic, playing on his region's economic envy and political ambition, has been seeking to leash the awakened ethnic Albanian majority (90 percent) in Serbian-controlled Kosovo. A crackdown has left dozens of Albanians dead, and the region is on fire. Across the border, meanwhile, long-reclusive Albania itself has begun to seethe in the ways that have been transforming the rest of Eastern Europe in the last year.

Yugoslavia's unity and nationalist resolve were useful to the West in the Cold War years to make that country an effective check on Soviet influence in Europe's sensitive Balkan quarter. In turn, the Cold War enabled a Communist Party, ostensibly one rising above Yugoslavia's ethnic rivalries, to stay in power.

Now no East European country is so threatened by the East-West warming. The glue of fear of Moscow is gone, and the West no longer has the same strategic reason to promote a strong, united Yugoslavia. On the contrary, though the West is certainly not looking to see any East European country split along ethnic lines, its messages of democracy, human rights and respect for local nationalism all tend to work against the old Communist style of centralized rule -- a rule more or less repressive, it must be recalled, depending on circumstances of the day. For Yugoslavs, a difficult passage is in train.