BITTERFELD, EAST GERMANY -- Kurt and Christa Apel spent Good Friday sitting on the steps in the back of their soot-covered rowhouse, rocking their baby granddaughter, worrying that she will die before her time.

"Her eyes already water whenever she's outside," Christa Apel said of Isabela, who is nine months old and is, so far, the only member of the family who has not developed bronchial problems. "This place is dirt, dirt, dirt -- just filth."

Kurt Apel, a 57-year-old electrical worker who says he has been taken for 75, walked around the puddle of black water that separates his house from Bitterfeld's aluminum plant. "Look, even near the garbage," he said. "There's no mice, no nothing. Nothing lives here. Nothing can live here."

Bitterfeld, 110 miles south of Berlin, is the dirtiest place in the most polluted country in the world, according to gov-ernment statistics and Greenpeace, the international environmental group. It is the capital of East Germany's chemical industry, a place where towering smokestacks release plumes of bright yellow, jet black and hazy brown smoke -- a total of more than 15 times the East German average of sulfur dioxide and dust.

But Bitterfeld's pollution does not only sicken the people here and help poison East Germany's forests, water and air. It is one of the most prolific polluters in an industrial belt stretching from southern East Germany through southern Poland to northern Czechoslovakia -- a region that scientists blame for much of the pollution damage throughout Central and Western Europe.

Studies by the International Institute for Applied Systems Analysis, a U.S.- and Soviet-founded research center near Vienna, have traced pollutants falling on Western European countries back to their source: East Germany and its neighbors.

In this grimy town, children fall ill soon after birth and life expectancy is five years below the national average for men, eight years below for women. The pollutants -- waste from chemical and steel production and especially the outmoded brown coal that East Germany uses for energy -- have deprived residents of the simple joy of a sunny day. Friday was partly sunny 10 miles away, but Bitterfeld sat under its constant grey haze.

"Nobody has any idea how to clean up Bitterfeld," said Jeffrey Michel, an environmental consultant who has worked for the East German government. "There's actually been talk of simply entombing the whole area."

Here, rivers flow red from steel mill waste, drinking water contains many times the European Community standards for heavy metals and other pollutants, and the air has killed so many trees -- 75 percent in the Bitterfeld area -- that even the most ambitious clean-up efforts now being planned would not reverse the damage. East Germany fills the air with sulfur dioxide at almost five times the West German rate and more than twice the Polish rate, according to a recent study.

One chemical plant near here dumps 44 pounds of mercury into the Saale river each day -- 10 times as much as the West German chemical company BASF pumps into the Rhine each year. Every day, each one of East Germany's sputtering Trabant autos coughs as much carbon monoxide into the atmosphere as do 100 Western cars equipped with catalytic converters.

The extent of East Germany's environmental mess has become public only since the Communist regime was thrown out last fall. "In 1986, I was kicked out of East Germany when I was trying to get information on forest death," said Sten Nilsson, a Swedish forest ecologist who has collected data showing that many East German forests "are dead, completely. The country is on the verge of total ecological collapse."

Nilsson's East German colleagues knew what was happening years ago. But they remained silent on orders from their government. "Actually, the East Germans were in the very forefront of measuring the effects of pollution," Nilsson said. "They told their government. The message they got back was to plan to replant the forests because the government refused to get rid of the brown-coal heating system."

The East German government ordered scientists to develop species of trees that would resist pollutants. "But that is, of course, nonsense," Nilsson said.

The new East German government has admitted its problems -- symbolically renaming its Ministry of Environmental Control the Ministry of Environmental Protection -- and developed an extensive plan to slow the pace of damage.

But countries in the throes of transition to a market economy are in no position to invest heavily in environmental controls. East Germany spends less than half of one percent of its budget on the environment. The comparable figure in West Germany is 1.2 percent of a much larger budget.

East Bloc countries need foreign investment, and scientists around the world are trying to convince Western governments that it is in their interest to help.

"Spending money on cleaning up your own country is like throwing away money if the pollution comes from somewhere else -- and it does," said Robert Pry, director of the Vienna institute. "Now Holland is seriously considering shipping their equipment for cleaning up smokestack emissions to East Germany, not out of altruism, but for their own protection."

The West German government has pledged about $600 million in environmental aid to East Germany, including money to scrub smokestack exhausts, decrease the amount of brown coal being burned, and extract mercury and other metals from water before it is dumped in the Elbe river. But the West German Institute for Economic Research estimates that it could cost $200 billion during the next 20 years to clean up East Germany's ecological catastrophe.

Bonn has begun to cut back on its own contribution to the East German disaster, slowly reducing the amount of trash it dumps there -- a practice the Communist regime found to be a steady source of hard Western cash. Last year, West Germany sent 4.5 million tons of garbage over the border; this year, that figure has been reduced by about one-third.

Reversing the unnatural death of East Germany will be slow, expensive and at times politically unpopular. "With every bit of information we get, the situation looks gloomier," said West German Environment Minister Klaus Toepfer. "It will take a good decade just to get to grips with the worst pollution."

The impending rush of Western investment also worries East German environmentalists. "They are scared that Western companies will come in and do things they're not allowed to do at home," Pry said. "And they will. It's up to the Western countries to help the East Bloc prevent their economic turnaround from raping the environment."

Both East and West Germany are trying to do that. Environmental officials in both Bonn and East Berlin want to change East German laws as quickly as possible to make standards as strict as in West Germany.

There is, so far, broad popular support for action. Ecological concerns were a primary force behind last fall's popular uprising in Eastern Europe; in East Germany, crowds demanded statistics on the health effects of their poisoned air and water even before turning their wrath on government corruption and the Stasi secret police.

But despite the spreading recognition that places like Bitterfeld are the globe's festering wounds, neither Germany has figured out what to do. Even as scientists collect data showing frighteningly high levels of nitrates in infants born in the Bitterfeld area, governments are trying to balance economic and ecological needs.

Shutting down polluting plants means losing thousands of jobs. Already the East German government has announced it will close 10 percent of Bitterfeld's decades-old plants, laying off nearly 1,000 of 17,000 workers. That frightens Bonn politicians wary of any act that might cause more miserable East Germans to move West.

And it frightens plant managers, who have posted billboards in the town square exhorting residents to support local industry. "Chemicals are necessary!" the signs say. "Our desolate environmental condition is produced by extraordinarily high pollution of air, water and earth. But chemicals belong to our life and without them we cannot move to the future."

Some area residents have lived with the situation for so long, they don't know what to think. Ingrid Wurst, a 37-year-old assembly line worker, stopped a foreign visitor on the street and said, "May I ask a question please? Does it really smell awful here?"

But many Bitterfeld residents have used their new freedom to travel to cleaner places; often they return ready to sacrifice for less pollution.

"You come back and it's worse than you ever realized," said Axel Roder, 26, whose 6-year-old and 18-month-old children have chronic bronchial infections. "I'm not leaving; my friends are here. But they have to shut down some of these places. Even if two-thirds of the people are let go."