An Iraqi defeat is "a realistic possibility" in the Iran-Iraq war and would be "catastrophic" for Western interests in the Persian Gulf, the Senate Foreign Relations Committee concluded in a report issued yesterday.

To end the conflict and thus avert an Iraqi defeat, the United States should step up its efforts to get the United Nations to impose a comprehensive arms and economic boycott on Iran, the report recommends.

"Iraq is under heavy military pressure, and its ability to withstand Iran's assaults indefinitely is an open question," the report said, adding that Iraq's loss of its besieged southern port city of Basra is "a distinct possibility."

"An Iraqi defeat, which must now be regarded as a realistic possibility, would immediately threaten the sparsely populated Arab gulf monarchies," it said. "An Iraqi defeat would be catastrophic for Western interests."

The report, prepared by three staff members of the Foreign Relations Committee, provides the gloomiest assessment of Iraq's military prospects published to date by any congressional committee or the Reagan administration.

It runs counter to the U.S. intelligence community's view that Iraq can hold on, though some U.S. analysts are questioning how long President Saddam Hussein's regime can endure a war of attrition.

"The report shows the danger of a possible Iraqi collapse is greater than commonly understood and that the perils for the United States in the gulf are certain to increase," Committee Chairman Claiborne Pell (D-R.I.) said.

The report says that the best way to prevent an Iraqi defeat is to bring "concerted world pressure" on Iran. "A broad, mandatory arms embargo -- and if possible an economic boycott -- would significantly limit Iran's war-fighting capabilities."

The report focuses on Iraq's military posture after seven years of warfare and describes Iraq as being under heavy military pressure all along its 900-mile border with Iran.

It says that "diplomatic observers" in Baghdad have concluded that Iraq almost lost Basra in the Iranian offensive on that city last January. Iran's inability to launch a second assault simultaneously elsewhere on Iraqi lines, apparently because of command and control problems, saved Basra, it says.

When the report's authors visited last month, Basra was "a ghost town," its population down to 200,000 from 1.5 million in 1980.

"The narrowness of Iraq's escape underscores the country's vulnerability on the southern front," it concludes.

During a 17-day visit to the gulf region, the travels of one of the staff members, Peter W. Galbraith, included a trip into Iraq's Kurdish northern provinces, where he found the government's hold has deteriorated "dramatically" because of an Iranian-backed insurgency there.

That insurgency poses "a major military threat" to Iraq's control of the Kurdish region, where 20 percent of the population lives.

The government has been moving Kurds from their mountain villages into new towns in the valleys, and to make sure they stay put, the report says, "been dynamiting the evacuated Kurdish villages."

The situation in the central sector of the war front, which has been the most stable because of Iraq's superior armored forces, could change because Iran has yet to use the 2,008 TOW antitank missiles it obtained from the Reagan administration, according to unnammed "analysts in Baghdad" cited by the report.

The report also finds:Kuwait first approached the United States and the Soviet Union about reflagging its oil tankers, or chartering foreign ones, in September 1986, three months before the Reagan administration's version of events leading up to the U.S. decision to protect 11 Kuwaiti tankers.

A Senate staff aide said the notes of two members of the investigating team clearly indicate that Kuwaiti officials had given them September, and not December as the administration has said, as the initial date of Kuwait's request for help. The aide said the date had surprised the team members, who had checked it again with a high-ranking Kuwaiti official. Iran has laid an estimated 60 contact mines, of two different types and size explosives, in three different areas of the gulf. Pressure is building from the Arab gulf states to purchase U.S. arms, particularly new aircraft and Stinger missiles. Four of the six Arab gulf states are "actively considering" the purchase of F16 jet fighters or "similar aircraft," and Bahrain, Qatar and the United Arab Emirates want Stingers.