In late January, the World Jewish Congress was meeting in Jerusalem when its staff learned of a dispute in Austria about plans to give the Austrian Air Force Academy a plaque in memory of Gen. Alexander Loehr. Loehr, regarded as the founder of the Austrian Air Force, was executed as a war criminal by Yugoslavia in 1947 for the bombing of Belgrade.

The dispute about the plaque sparked a firestorm of controversy that spread far beyond Austria and threatens to engulf Kurt Waldheim, who as secretary general of the United Nations from 1972 to 1982 was one of the most prominent actors on the world diplomatic stage.

Until five weeks ago, Waldheim seemed to have established a secure niche in the annals of U.N. and Austrian history. In the 40 years since World War II, he rose through the ranks of the Austrian diplomatic service to serve as his country's foreign minister before taking the leadership of the U.N. secretariat. He currently is a candidate for president of Austria in elections scheduled for May 4.

But another part of Waldheim's past has emerged from the shadows where it lay for decades and threatens to destroy his credibility as a man who wants to be remembered in terms of the title of his 1977 memoirs: "The Challenge of Peace."

Instead he now is besieged by charges that as a German Army intelligence officer in the Balkans from 1942 to 1945, he directed interrogations of prisoners, knew about mass deportations of Jews to Nazi death camps and was listed by Yugoslav authorities as a war criminal wanted for murder and other atrocities against partisans.

These charges have come to light because some of the WJC officials at the Jeruslem meeting decided to look into the Loehr tablet incident. In reading Austrian press accounts, Eli M. Rosenbaum, the WJC general counsel, was startled by a brief paragraph in the news magazine Profil. It quoted an Austrian professor as saying that Waldheim had been an officer on Loehr's staff in the Balkans.

As a former Justice Department attorney specializing in war crimes, Rosenbaum knew that this assertion was at odds with Waldheim's accounts of his war service. In his books, press interviews, authorized biographies and the literature for his presidential campaign, Waldheim always had said outright or sought to create the impression that after being wounded on the Russian front in 1941, he had spent the rest of the war in Vienna, studying for his doctorate in law.

The discrepancy prompted the WJC to launch an investigation that revealed that documents relating to Waldheim's military service had been gathering dust for decades in the archives of the United States, West Germany, Austria, Yugoslavia and the United Nations.

In February, Israel Singer, secretary general of the WJC, sent a memo to Edgar M. Bronfman, the organization's president, saying that there appeared to be serious questions about Waldheim's past and asking whether the WJC should pursue an issue that was likely to cause worldwide controversy. Bronfman sent the memo back with the terse notation, "Do it! EMB."

On March 4, The New York Times, acting on what the WJC says was information it provided, published a dispatch from Vienna revealing that documents there showed that Waldheim had served in Yugoslavia and Greece. The Times quoted him as saying in an interview that he had played only a minor role and had not known about war crimes that occurred in those countries.

At the same time, the WJC began making public the findings of its still continuing investigation. On March 25, Robert E. Herzstein, a professor of modern European history at the University of South Carolina, disclosed at a New York press conference that at the WJC's request he had searched the National Archives in Washington and had discovered documents detailing atrocities committed by the units to which Waldheim was attached in the Balkans.

Those documents that have turned up, while raising several serious questions about Waldheim's activities in the Balkans, are by no means conclusive proof of the charges swirling around him.

Some of the material is based on testimony from witnesses whose reliablity is suspect. Much of the rest is susceptible to differing interpretations, and after the passage of so many years, it is doubtful that even the most exhaustive investigation can establish the true circumstances of the incidents that the documents describe.

Waldheim initially sought to dismiss the charges as an attempt by political opponents to discredit his presidential candidacy. When that failed to silence his accusers, he wrote a detailed memorandum seeking to establish that he was a noncombatant officer working principally as a German-Italian interpreter and that he was performing duties elsewhere when the Army group to which he was attached carried out massacres or burned villages.

However, his rebuttal did not address what Rosenbaum and other WJC officials contend is "the underlying issue that calls into question the credibility of everything else that he has said."

They argue that Waldheim, by focusing on denials of complicity in war crimes, has diverted attention from the fact that for 40 years he deliberately concealed the truth about his service in the Balkans. Even now, they add, he steadfastly refuses to explain why he didn't want that known.

In "The Challenge of Peace," he wrote that he was wounded in the leg on the Russian front and medically discharged in 1941. He added: "By the time I was repatriated to Austria in 1942, it had become impossible to leave the country . . . . I was permitted to resume my studies toward a doctorate in law, which I obtained two years later."

In a 1980 letter to Rep. Stephen J. Solarz (D-N.Y.), he said, "I myself was wounded on the eastern front and being incapacitated for further service on the front, resumed my law studies at Vienna University where I graduated in 1944."

And, when he launched his presidential bid early this year, Waldheim's campaign staff flooded Austria with biographical leaflets that stated: "After being wounded in the war, I was unfit for front duty for a very long time. This allowed me to finish my law studies in 1944."

That these statements were false or, at best, deliberately misleading was tacitly admitted by Waldheim when he attached to his rebuttal memorandum a detailed chronology of his service with the Austrian and German armies from 1936 to 1945. But, except for some cursory claims that his book was not intended to be a comprehensive autobiograpy with "boring details" about his life as a noncombatant soldier, he has sidestepped all demands for an explanation.

Waldheim's son, Gerhard, who convinced his father to write the rebuttal and who currently is in the United States to plead his family's case, said in an interview that he believes his father's unwillingness to confront this issue is the result of "an emotional and psychological block" that has affected him since the war.

"It is not unlike the trauma that afflicted many American soldiers who fought in Vietnam," the son said. "Like them, my father was on the losing side in a terrible and unjust war. He did not want to be there, but he had no choice. He suffered terribly from his wound and his experiences on the Russian front, and I think that from that time on, he simply blocked out of his mind everything that happened in his subsequent Army service. Throughout my life, my father always has been unwilling to talk about that time even with me and the other members of our family."

Others, who dealt with Waldheim during his U.N. years, are inclined to a less charitable view. Several diplomats and U.N. secretariat employes, while stressing that they cannot pass judgment on the controversy, privately recalled that when Waldheim was secretary general he was criticized frequently for an alleged unwillingness to get involved in controversial situations.

"Kurt was always a man who got ahead by sticking his finger up to see which ways the winds were blowing and then steering the course that seemed least likely to get him in trouble," said one former associate, who asked not to be identified.

His defenders say that he had no other choice because it was his job to steer the world body through the competing pressures of superpower and Third World rivalries. But Waldheim, whose stiff manner used to cause subordinates to refer to him behind his back as "The Headwaiter," also was widely known as a man very concerned about his image. Several U.N. sources said that if the facts now coming to light had been known in 1971, it is almost certain that he never would have become secretary general.

Another reason for Waldheim's reticence in discussing his war record probably can be traced to the Austrian political milieu from which he came.

Austrians of Waldheim's generation, citing the fact that their country was forcibly annexed by Germany in the infamous 1938 Anschluss, long have sought to portray their country as the victim of wartime occupation. But those who know the country well are aware that many Austrians were enthusiastic supporters of Hitler and participants in the Nazi war machine.

It is not something that older Austrians like to be reminded of, and anyone seeking to get ahead in Austrian politics or public service -- whether as a young aspirant for the diplomatic service in 1945 or as a candidate for president in 1986 -- is quite aware that he has little to gain by raising discomfiting echoes of the past.

However, while all these factors might help to explain why Waldheim concealed his record, they do not answer the question of whether he took part in or knew about war crimes. In terms of specific acts, the available documents establish that the Army group to which Waldheim was assigned engaged in massive killing of Yugoslav partisans during a 1942 campaign in the Kozara Mountains and burned Yugoslav villages in the vicinity of Stip and Kocani in 1944.

A division history of the Kozara campaign, where it is estimated that 3,500 partisans were killed, described it as "a battle without mercy, without pity . . . " The history contains what appears to be an honor roll of 34 German participants in the campaign. The 25th name on the list is "Lt. Waldheim."

That same month, the Nazi puppet government in the state of Croatia bestowed its top military decoration, the Order of the Crown of King Zvonomir, on Waldheim for activity "under enemy fire."

In regard to the village burnings in October 1944, a report made by a Yugoslav war crimes commission in 1947 and forwarded to the United Nations charged that Waldheim was a participant and was wanted as a war criminal for "murder, slaughter, shooting of hostages and ravaging of property by burning of settlements."

In his recent rebuttal memorandum, Waldheim contended that at the time of the Kozara campaign, he was serving as liaison officer with an Italian division 200 miles away. He also said that a week before the 1944 village burnings, he had been transferred by airplane to a headquarters 200 miles to the north of Stip and Kocani. He asserted that there are several witnesses who can testify to his whereabouts on both occasions.

Waldheim insisted that he did not know why his name appears on the division honor list or why he was awarded the Croatian medal. He speculated that he might have been among several people whose names were chosen at random from his unit's personnel rolls.

Gerhard Waldheim noted that the Yugoslav war crimes report is based largely on the testimony of two soldiers who reportedly served under his father: Egbert Hilcer, identified in the report as an executed war criminal, and Johan Mayer, who died in 1972.

He said there is no record of anyone named Egbert Hilcer serving with Waldheim's unit. He also contended that Mayer reportedly said later that he had given false testimony to curry favor with his Yugoslav captors and that he was an unreliable person convicted five times for crimes in Austria.

Lastly, there is the question of whether Waldheim, while serving with the high command of Gen. Loehr's Army Group E near Salonika, Greece, from late 1942 to October 1944, knew about prisoner interrogations that involved torture and the Army group's participation in mass deportations of Greek Jews.

The personnel charts of Army Group E list Waldheim as head of an intelligence section whose duties included processing reports, issuing directives and briefing senior officers about prisoner interrogations and "special projects," a term frequently used as a euphemism for actions against Jews.

A photograph dated May 22, 1943, shows Waldheim in uniform near Podgorica (now Titograd), Yugoslavia, at an airfield meeting between an Italian general and Gen. Artur Phelps, commander of the Prinz Eugen Waffen SS Division. Waldheim apparently was there as an interpreter.

But, according to the division's history, the discussion that he interpreted involved strategy for pursuing "Operation Black," a drive by the Prinz Eugen Division against partisans that resulted in the deaths of more than 16,000 Yugoslavs, including pregnant women and children who in some cases were tortured or burned alive in their houses.

In reply, Waldheim has insisted categorically that he never participated in or directed interrogations. He said that despite his intelligence officer title, his primary duties were as an interpreter and that his intelligence work consisted mainly of managing a flow of paperwork without paying attention to what it contained.

Waldheim also said that any reports dealing with Jewish questions went to a different headquarters unit and that frequent interpreting assignments elsewhere and leaves to pursue his studies in Vienna kept him out of the Salonika area when the heaviest deportation activity was taking place.

In the meantime, the inquiry into Waldheim's past has spread from the unofficial efforts of the WJC to the Israeli and Austrian governments, which have received copies of the U.N. file on the 1947 Yugoslav war crimes report.

So far, there is no indication of where their respective investigations will lead. But as Israel's U.N. ambassador, Benjamin Netanyahu, said after examining the file, "There is no way that this matter can be laid to rest."