AT THE END of November, the United States resumed full and formal diplomatic relations with Iraq after a 17-year break. Less than a week later, Iraq began a series of attacks on third-country vessels calling at Iranian ports and oil terminals. In an escalation unmatched since Iraq began the intermittent "tanker war" in the Persian Gulf last spring, Baghdad has since claimed successful hits on nine or more "large naval targets" -- tankers. Most of these strikes have been independently confirmed. During that time, the United States, which prides itself on being the world's leading champion of the rights of free maritime traffic, has in effect averted its gaze.

It was clear enough as Washington moved toward resumption of ties with Iraq during the fall that the United States had decided its previous stance of formal neutrality in the Gulf war had not brought results and that a more pronounced tilt to Iraq was in order. It was just as clear, however, that the United States could not afford to be seen as reopening a partnership with a country, Iraq, which was acting in indefensible ways.

The Iraqis toned down some of the policies -- gas war is one -- that brought them earlier obloquy in the West. Shooting up innocent tankers is not in the same category, but shooting up tankers is not something the United States can ignore or condone. This country, the world's leading seapower, has too many of its own ships at sea and too many of its friends' ships at sea. The U.S. government should be telling the Iraqis it supports many of the steps they have taken in the war against Iran, but not the blasting of innocent shipping on the high seas.

Iraq has fairly protested the business-as-usual policy of many of Iran's Western trading partners, who are making profits by trading with Iran even though, in the current stage, Iran is the party principally at fault: it occupies Iraqi territory and refuses to negotiate. The right way for American diplomacy to deal with its friends' shortsightedness, however, is not to go along with Iraq's tanker war but to approach those friends, as the Iraqis have asked, and to do what can be done to deny Iran customers for its oil.

Iran is hurting: its pledge, so far untested, to try the recent plane hijackers shows a revealing new sensitivity to its neighbors. The United States should do nothing, such as ignoring Iraq's attacks on innocent shipping, that raises the question of whether there is a second outlaw regime in the Gulf besides Iran.