CONGRESS and city officials appear to be headed toward another confrontation of federal and local authority like the one that took place in December 1979 -- and ended badly for the District. On that occasion, Congress voted to override a bill passed by the city council to prohibit new foreign chancery construction in low- or medium-density residential areas. Even many ardent home-rule supporters on the Hill bolted to support the veto. This was a first, which came only a month after the Iranians had seized American hostages, an act that raised congressional consciousness to new heights on the delicacy of relations with foreign governments.

Now Congress has taken the offensive to try to ensure that D.C. officials no longer control zoning authority over the location of new foreign diplomatic buildings and those of international organizations. Last Thursday, the House Foreign Affairs Committee voted unanimously to transfer such zoning authority from the D.C. Zoning Commission and the Board of Zoning Adjustment to the National Capital Planning Commission, which has District representatives but a federal majority.

The zoning changes are part of a broader legislative proposal to create an "Office of Foreign Missions" within the State Department that would wield greater authority than now exists to regulate foreign diplomats and their facilities in this country. The State Department argues -- and we agree -- that it badly needs such power, if only to make somewhat more credible the threat of retailiation for harassment of American representatives abroad.

Still, the proposal represents a serious revision of existing home-rule practices and statutes. Both sides concede the good will and legitimate concerns of the other. The mayor has acknowledged that the currently "revised proposal does not constitute a vast improvement over the provisions" of a 1980 bill. The measure's congressional sponsors, in turn, have made important concessions to home-rule sensitivities, including a ban on new chancery or embassy construction in low-density residential neighborhoods. Moreover, the House draft leaves the degree of city influence ambiguous, mandating that "the municipal interest" be considered along with "the federal interest" and requiring that the mayor's determination of city interests "be given substantial weight."

In the bargaining ahead, Congress should be pressed for a more precise explanation of "municipal interests" -- and rights -- in disputed zoning decisions. At the same time, if city officials succeed in striking a reasonable compromise, they may win much-needed support on the Hill for the budget, debt and home-rule issues that remain to be resolved.