ON THE EVE of the third millennium, the year 1992 will be a time for celebrating new beginnings and old adventures. Spain, western civilization's stepping stone to the New World, is the designated focal point of these celebrations.

In less than six months, the storied cities of the Iberian Peninsula will host an array of events marking the 500th anniversary of Ferdinand and Isabella's sponsorship of Christopher Columbus. Madrid has been designated the cultural capital of Europe for 1992; Seville, capital of Andalusia, will host a World Expo beginning April 20; and Barcelona, capital of Catalonia, will be the site of the Summer Olympics.

It is to be Spain's year in the sun. Yet all is not sunny.

On July 6, a Basque terrorist group distributed a press release advising travel agencies to warn their clients they will be taking a risk by visiting Spain next year.

The threat is not to be taken lightly. Spain ranks with Colombia, Lebanon and Northern Ireland among the world's terrorism trouble spots, and Spanish preparations for security in 1992 are enjoying little success.

The instability of Spanish "unity" is part of the national heritage. The 1987 constitution emphasizes, with more optimism than political realities warrant, the "indissoluble unity" of a nation in which more than 25 percent of the people speak a language other than the mother tongue. Contradictory statutes at-tempt to resolve the tension between the need for a strong central government and regional desires for autonomy.

One result of these tensions is that Spain is an incubator for violent separatist movements. The bloodiest of these is ETA (an acronym standing for "Basque Fatherland and Liberty"), the largest and deadliest terrorist group in mainland Europe. ETA is responsible for more than 700 deaths since it was formed in 1968 including, in 1973, the assassination of Adm. Carrero Blanco, selected by Francisco Franco to be his successor.

The group has consistently demonstrated a keen sense of public relations, and the events of 1992 will provide it, and other separatist groups, with an unexcelled opportunity to put its case violently before the court of world opinion. Henri Parot, a captured ETA operative, has confirmed that ETA will "use the '92 celebrations to force negotiations favorable to their goal." Last December, ETA operatives detonated a car bomb in Barcelona -- its 43rd in less than a decade. The blast killed six police officers and two civilians, injured at least 15 others, and marked the re-emergence of an ETA capability in Barcelona not seen since a 1987 attack on a supermarket resulted in 21 deaths.

Olympic games are not restricted exclusively to the city to which they have been awarded; other cities are used as venues for some of the games. One such city will be Vic, 30 miles north of Barcelona. On May 29, ETA operatives pushed a car full of explosives down the unsecured ramp of the parking lot under the Civil Guard barracks in Vic. The explosion demolished the building, killing one guardsman, eight women and children, and injuring at least 50 others.

On June 1, an ETA package bomb addressed to a construction firm in Madrid was retrieved by a Spanish explosive ordnance disposal team. The device exploded in their van, killing the team and injuring six other people. On June 23, the group car-bombed a police barracks in San Blas, a town near Madrid, with eight casualties -- and potentially many more had a motorcycle not blocked the path of the car.

Valencia is another Olympic venue. ETA affirmed its capabilities there in March by murdering the head of a construction company building a highway in the Basque country (a $300-million project that ETA has succeeded in delaying for nearly two years). Officials believe ETA is developing a support base in Valencia in preparation for the Olympics.

Nor does ETA intend to ignore Expo '92 in Seville. Parot, the captured operative, told Spanish police that he had been ordered by ETA leader Francisco Mugica Garmendia to attack facilities associated with Expo; indeed, he was arrested while preparing to destroy the National Police headquarters in Seville, using a 350-kilogram truck bomb loaded with shrapnel.

Spanish police have recorded limited success against the group. On June 1, security forces raided ETA safehouses near Barcelona, arresting several members and killing two leaders of the Barcelona commando cited as responsible for the bombing in Vic. The operation led Spanish Interior Minister Jose Luis Corcuera to declare the Barcelona commando "completely smashed."

Such statements are meant to reassure foreign security officials that Spain has its house in order on the security front; they have the opposite effect. The Barcelona commando is not "completely smashed." ETA designates at least two commandoes for each region, one serving as an operational group and the other as a back-up. As one group falls, the other takes its place in a regenerative process, and a new group steps into the back-up role.

ETA, though the bloodiest of the separatist groups, is only one of several. Catalonia harbors two, Terra Lliure and ECRA, sharing a common wish to be independent of the government in Madrid. In Catalonia the language of polite society is not Spanish but Catalan, and antipathetic attitudes toward the coming events in Barcelona are reflected in local suspicions that somehow Madrid is using the games to "hispanicize Catalonia."

Terra Lliure is sometimes called the ETA of Catalonia, and it too has announced that it will target the Olympic games. The group recently declared that it had foresworn violence, however, and plans to disrupt the Olympics by other means, euphemistically referred to as "disturbances."

Displaying skills that continually confound Spanish security measures, Terra Lliure was able to infiltrate at least 150 of its members into volunteer groups working with the Olympic organizers. In this manner, they were fully briefed on plans, including security procedures, for the games.

The separatists do not have the field entirely to themselves. The First of October Anti-Fascist Resistance Group (GRAPO), associated with a series of bombings, assassinations and kidnappings in the '70s and early '80s, has re-emerged as a threat. GRAPO recently demonstrated its low regard for Spanish security by bombing a meeting in Barcelona of police and officials from former Olympic host nations gathered to discuss security for the coming games.

The attack further confirmed the ability of terrorist groups to penetrate Spanish institutions. In March, Interior Minister Corcuera, appearing before the Commission for Internal and Justice Affairs in Madrid, admitted that ETA operatives and narcotics traffickers had tapped police phone lines. Compounding the embarrassment, the minister noted that terrorists not only listened in on security officials talking in Madrid but knew which phone lines the police were tapping.

The arrest of GRAPO leader Fernando Silva Sande is not expected to affect the group's ability to operate effectively or its propensity for violence. That these groups will attempt to attack the Olympic Games and Expo '92 is a virtual certainty.

Not so certain is what other groups, particularly Middle Eastern terrorist elements, will seek to do. Middle Eastern terrorism is sensitive to the value of symbols; the "discovery" of America is a textbook occasion for those unhappy with the United States to emphasize their views with violence.

Spanish officials were denying, as recently as February, the presence of Middle Eastern terrorists in Spain. Intelligence and international security officials have little confidence in this claim. Indeed, international security officials are generally concerned about Spain's ability to protect its visitors against the threat of terrorism in the coming year. Spain has allocated $380 million for security alone at the Olympics. At the same time, public statements about security at Expo '92 have a fatalistic ring to them: For example, State Secretary for Security Rafael Vera is reported to have said it will be "impossible" to secure Expo '92.

What is most unsettling about Spanish preparations for 1992 is the fact that so much remains undone, with so little time left. Regional divisons and separatist sentiments are exacerbated by political jockeying and jurisdictional disputes. Official visitors to Spain quickly discover that everyone is in charge, but no one is responsible. This makes almost impossible the necessary preparation -- including security provisions -- for a schedule as ambitious as Spain has taken upon herself.

Spanish difficulties in preparing for 1992 are not restricted to matters of security. Organizers of the Barcelona Olympics are accused of reneging on promises made in their efforts to bring the games to their city. Money for the construction of athletic facilities has been used for urban renewal projects, and organizers have devised a scheme by which visitors will be admitted to events for only a half a day, thus doubling the number of people who can attend the events and halving the time they will be able to enjoy them. Hotel space is in short supply and Spain's neighbors have been incensed to learn that of the already inadequate 60,000 seats available in the main stadium, only 6,000 are to be made available to foreign visitors.

Any youngster whose neck hairs have ever tingled to the tale of El Cid knows that it is a mistake to count the Spanish out when things appear grim. But if Spain means to throw us a four-star birthday party next year, she is going about it in a very unreassuring manner.

Beth Finkelstein is a Spanish linguist and a senior analyst at International Security Management, Inc. Noel Koch, an adjunct professor at Georgetown University, was the Pentagon official responsible for anti-terrorism and special operations programs from 1981 to 1986.