PARIS -- "I wish you lots of happiness. For you, and for the French people."

Thus spake Anis Naccache to his French lawyer just before boarding an Iran Air 747 waiting for him at Orly airport last Friday. This tender, thoughtful farewell for the French people came from the leader of an Iranian-Palestinian gang that shot dead one French policeman, paralyzed another for life and killed an innocent French bystander a decade ago.

Nothing personal, Naccache was saying in the now familiar refrain of terrorists who have been let go. Just doing my job, ma'am. I've got a cause to support.

President Francois Mitterrand pardoned Naccache and his four assistant killers after 10 years in jail -- about half the time an ordinary French murderer would spend behind bars with time off for good behavior. The news was floated out of the Elysee palace late on Friday afternoon, just as the French month-long summer vacation was beginning and national attention was wandering. (Has Mike Deaver landed the Elysee palace account?)

Naccache was sent from Tehran to shoot Shahpour Bakhtiar, the exiled prime minister of the fallen shah. If the French policemen had stood aside, and Bakhtiar's Paris neighbor had not opened the door at the wrong moment, they would still be around to be wished lots of happiness by this big-hearted Iranian guy. Nothing personal, monsieur et madame, just a small efficiency deficiency.

The willingness of governments to overlook such youthful indiscretions -- to agree not to take terrorism personally -- shows up as well in the muted Western response to the disclosures that East Germany sheltered West German terrorists and Hungary hosted "Carlos" and his murderous band. It is present in the lenient treatment Italian courts give their right-wing terrorists. One youthful French politician captured it nicely if indignantly in defending Mitterrand's decision:

"I don't know many Western countries that would have kept a terrorist 10 years in their jail!" By past French standards, Mitterrand has been draconian in this case. In 1977, his predecessor released Palestinian terror chief Abu Daoud after four days, when the West German government hesitated to take delivery of the planner of the 1972 Munich Olympics siege.

Will the Naccache pardon bring the release of Western hostages in Beirut, as French officials hint? Or will it lead instead to contracts for French firms in Tehran? Could that be the "lots of happiness" that Naccache had in mind on the Orly runway?

Despite the Iran-contra affair, Americans are conditioned to believe that their government does not behave in such a craven fashion. But the United States also avoids taking terrorism personally when it suits the purposes of politicians and diplomats.

Iraq is to Washington what Iran is to Paris in this case -- that is, Iraq continues to show America's willingness to pardon and explain away evil. The demands from Saddam Hussein that Kuwait give him a multibillion-dollar cash payoff and territory or be invaded have forced the State Department to quit defending the Butcher of Baghdad in public. But the desert princes of Foggy Bottom and some members of Congress still argue that Iraq is too important a customer of U.S. business to offend.

They will not admit that the Reagan-Bush policy of appeasing Saddam, abetted by the House of Representatives, has failed miserably, or acknowledge that Baghdad's support for terrorism now directly affects American interests.

Under Reagan, the State Department removed Iraq from the list of nations that support terrorism. Baghdad promised not to conduct terrorist operations on U.S. territory. That promise was broken under Bush: an Iraqi diplomat at the United Nations recruited a U.S. citizen, who has since absconded to avoid prosecution, to assassinate an Iraqi dissident in the United States. But the State Department glosses over this and other examples of Iraqi support for terrorism, seeing nothing personal in all this.

(Meanwhile, European diplomats confirm that the Abu Nidal gang has reopened its branch office in Baghdad, Iraqi denials notwithstanding. That is probably why Naccache's Palestinian accomplice, Mohammed el Satari, went directly to Baghdad from Iran's Mehrabad airport.)

Saddam calls in the American ambassador for a dressing down in front of Iraqi television cameras, and Washington smiles and swallows. Iraq backs Abul Abbas, the mastermind of the failed beach raid in Israel, so strongly that Yasser Arafat, afraid of angering Iraq, refuses to discipline Abbas and the U.S.-PLO dialogue collapses; but Washington pretends not to notice that Saddam has used his Palestinian client Abbas to torch the U.S. Middle East peace effort.

It takes years of government experience to be able to ignore facts as blatant as these. House of Representatives committee chairmen turned the other cheek in 1988 by defeating an Iraq sanctions bill approved by the Senate. The Senate again chose self-respect over mercenary instincts last week by passing a new sanctions bill. Only if they lack all sense of decency can the members of the House continue not to take Saddam's threats, bluster and support for terror personally.