The Iraqi Communist Party has condemned the war against Iran as a "ruinous military adventure" and bitterly assailed President Saddam Hussein in a new demonstration of deteriorating relations between the Soviet Union and its former close ally in the Middle East.

Iraqi party chief Aziz Mohammed, in a speech here Saturday printed today by the Soviet party newspaper Pravda, declared that Iraq should withdraw from Iranian territory occupied since the Persian Gulf war broke out last September.

"Thousands of sons of our fatherland are dying in the war, the economy and major industrial projects our people's labor has created over the decades are being destroyed, and living conditions of the broad masses of the people are getting worse," he declared.

Without naming him directly of launching a "campaign of the cruelest repressions and persecutions" against Iraqi Communists, as well as "against demoncratic forces of the country and against the Kurdish people."

Iraqi armed forces are largely supplied with Soviet arms and the Soviet Union is linked to Iraq by a friendship treaty signed in 1972. But Moscow, officially neutral, is said by well-informed Western sources to have halted arms shipments to Baghdad almost since the beginning of the conflict. It has twice turned down requests from Hussein's special envoy, Tariq Aziz, for more Soviet Military aid and the Kremlin hhas called on both countries to cease hostilities and negotiate.

Relations have been strained since the 1970s, when Baghdad executed a number of Communists. They worsened further last year when Moscow signed a friendship treaty with Syrai, Iraq's betterest rival in the Arab world.

Iraq's ruling Arab Baath Socialist Party sent a full delegation to the last Soviet Communist party Congress in 1976 and lavished praise on Moscow. But Hussein has sent no representative this time, a further indication of the strained relations. However, foreign observers here point out that Moscow is probably eager to avoid an open breach with Hussein because he is schheduled to succeed Fidel Castro next year as leader of the nonaligned movement.

The Soviet congress, which winds up Tuesday, went into closed session this afternoon to name a new Central Committee, which in turn will unanimously approve a new Politburo for five years. The Central Committee is expected to be expanded to about 300 members from 276, reflecting growth of party membership, and few seasoned observers expect major Politburo changes.

It is expected that First Deputy Premier Ivan Arkhipov, 73, will be made a nonvoting or candidate, Politburo member as befits his job, and that perhaps either of two present candidate members, Georgian party chief Eduard Schevardnadze or Azerbaijani chief Geider Alieve, could be brought to full voting status. Both made particularly devoted tributes to pary leader Leonid Brezhnev.