At the conclusion of a traditional year-end Te Deum Mass, Pope John Paul II interrupted a homily on "religious indifference" to once again condemn terrorism. Palestinian suicide squads had just struck at the Rome and Vienna airports, and the pope, once a victim of terrorism himself, was indignant and horrified. His words were clear and forceful, but Vatican policy, alas, is something else. It has yet to establish normal diplomatic relations with Israel.

Seventy-nine nations recognize Israel and have normal relations with its government. The Vatican is not one of them. Its apostolic delegate is accredited to the mayor of Jerusalem but not to the nation itself. The Vatican makes such distinctions, it has told Israel, not anymore on religious grounds (Pius X once said, "Jews have not recognized our Lord; we cannot recognize the Jewish people") but because the borders of the nation are not yet established.

That's an understatement. The West Bank and Gaza are occupied territories. The Golan Heights has been annexed. The capital, Jerusalem, once intended to be an international city, is held by Israel and claimed, at least in part, by Jordan. It is beloved by all Islam, Christianity and Judaism.

Still, other nations manage to have normal diplomatic relations with Israel. Spain, for instance, just became the 79th. Like most of the others, it does not recognize Israeli suzerainty over Jerusalem or the West Bank and Gaza. For that reason, it -- like the United States and most other countries -- has located its embassy in Tel Aviv, a city uncontestably in Israeli territory. Of the 79 countries with normal diplomatic relations with Israel, less than a handful maintain embassies in contested Jerusalem.

In some sense, the refusal of the Vatican to join those 79 may seem insignificant. After all, we are talking about the Vatican -- 108 acres in the middle of Rome. It has no commerce worthy of the name and, as Joseph Stalin cynically observed, no (army) divisions either. What it has in abundance, though, is awesome moral standing: when the home office of Roman Catholicism speaks, the world listens.

And to some ears, what the Vatican has been saying by withholding normal relations with Israel is uncomfortably close to what Arab extremists say. It is a variation of the Israel-is-illegitimate theme, another way of saying that the legal title to Israel is clouded and -- who knows? -- maybe even temporary. It is this view of Israel as both illegal and temporary that enables Yasser Arafat to vow that, in the name of humanity, he will limit his terrorist operations to Israel and the occupied territories -- and then, presumably, wait while a grateful world awards him the Nobel Peace Prize.

To the chagrin of Israel, the pope himself met with that very same Arafat. He had his reasons. Palestinian nationalism is a reality, and Arafat, by pronunciamento of the Arab states, is its spokesman. But Israel itself is a reality, and no matter what its borders may eventually be, no matter what the eventual disposition of the West Bank or the solution to the heartbreak of the wandering Palestinian, it remains a nation that is entitled to live in peace. The solution of territorial disputes, even a solution to the Palestinian problem, does not require the destruction of the state of Israel or the murder of children at airport ticket counters.

Of course the pope knows that. He knows, too, that full recognition of Israel might pose some difficulties for the Vatican in certain Arab and Third World states -- and maybe that, and not uncertain boundaries, is the real reason for the church's position. (When I asked the Vatican embassy here for comment, it told me to submit my questions by mail and said it would respond the same way.) But the experiences of 79 nations, including Egypt, prove that these are not insurmountable difficulties.

The pope's denunciation of terrorism was both appropriate and forceful. But as long as the Vatican treats Israel as something other than a normal nation, it lends support to those who say it is an illegal nation -- a trespasser in the Arab Middle East. The pope's words were fine, but if he really wants to be heard he ought to treat Israel no different from any other nation. Even in Rome, action speaks louder than words.