The Justice Department is "very close" to securing indictments in the 1988 midair bombing of Pan American Flight 103 over Lockerbie, Scotland, a recently retired CIA counterterrorism official said yesterday.

Vincent Cannistraro, who was chief of operations and analysis at the CIA's counterterrorism center, said investigators have made "substantial progress in identifying the modus operandi by which that bomb got on board."

Cannistraro's remarks, made to reporters at a luncheon seminar, were the first indication that the international inquiry, already the largest criminal probe in history, may have turned up enough solid evidence to stand up in a court of law.

Asked for comment, Justice Department spokesman Dan Eramian would say only that "we have made progress in the investigation and the investigation is ongoing." He refused to entertain further questions.

Cannistraro did not name those he expects to be indicted, but he appeared to be speaking of those suspected of actually putting the bomb -- plastic explosive hidden inside a radio-cassette player -- aboard the plane.

U.S. authorities can legally apprehend terrorists abroad under recently enacted "long arm" legislation, but the prospects of that happening in the Pan Am 103 case are slim even if indictments are returned. Cannistraro said he thinks the perpetrators "are beyond the reach of the law."

The significance of the indictments, then, would be to assert that the inquiry, which has covered more than 50 nations and more than 14,000 witnesses, has resulted in a case that U.S. prosecutors can prove beyond a reasonable doubt.

Investigators have long been convinced that the bombing was ordered by Iran in retaliation for the downing of an Iranian airliner over the Persian Gulf in July 1988. The investigators are certain the operation was to have been carried out by a Syrian-based terrorist group, Ahmed Jabril's Popular Front for the Liberation of Palestine-General Command.

Recently discovered evidence, however, suggests that the PFLP-GC backed off at the last minute, because of a raid by police on its West German cell, and that Libyan agents were then enlisted to do the job.

The bomb exploded in a forward cargo hold on Dec. 21, 1988, as Pan Am 103, which originated in Frankfurt, was flying over Scotland at an altitude of 31,000 feet. All 259 people aboard the plane were killed and another 11 died on the ground in Lockerbie, where the painstaking investigation has been centered.

Iranian officials had publicly threatened retaliation after the USS Vincennes mistakenly fired surface-to-air missiles at an Iranian Airbus over the Straits of Hormuz in July 1988, killing 290 people.

"From an intelligence point of view, the case has been solved," said Cannistraro, who retired from the CIA in September. "There is a lot of evidence that puts this at the doorstep of the Iranian government." By that, he said he meant that a majority of the "ruling members of that government made a conscious, joint decision," to retaliate against a U.S. target.

He also said there was evidence, which he did not detail, that Iranian President Ali Akbar Hashemi Rafsanjani knew of the decision and supported it. "It was not a rogue operation," Cannistraro stressed. He pointed out that Rafsanjani was commander in chief of the military in the summer of 1988 when the operation was reportedly commissioned through the Iranian Revolutionary Guard.

The PFLP-GC cell in the Frankfurt suburb of Neuss was broken up in October 1988 by West German authorities who seized four of five bombs with barometric triggers concealed in radio and stereo equipment.

"They were planning an 'air spectacular,' " aimed at other flights as well as Pan Am 103, Cannistraro said. Other targets are believed to have been an Iberia Air Lines flight from Madrid to Tel Aviv and an Israeli El Al Airlines flight.

Reports of Libyan involvement surfaced last month in the French newsmagazine L'Express and then the New York Times, saying that a fragment of the detonator found in the Scottish countryside was distinctly different from the detonators seized in the Neuss raid. Instead of a timer and altimeter to keep the bomb from exploding until it had reached a certain altitude, the Pan Am 103 detonator, the articles said, had only a timer.

The timer-only detonator, according to the articles and other sources, did match photos of timers seized from two Libyan intelligence agents who were arrested in the Senegalese capital of Dakar in February 1988 on an Air Afrique flight bound for the Ivory Coast.

Dakar police also found Semtex plastic explosive in the Libyans' luggage, along with the detonators, but released the two Libyans in June 1988 despite U.S. protests.

The Libyan theory would fit with other evidence such as tiny bits of clothing in the shredded suitcase that contained the bomb. The bits were later traced to a clothing shop in Siena, Malta. The island of Malta is familiar ground for Libyan operatives.

Investigators have long suspected that the suitcase was shipped to Frankfurt aboard an Air Malta flight, then transferred unaccompanied to Pan Am 103.

Cannistraro made his remarks at a luncheon signaling his debut as a senior fellow at the National Strategy Information Center. He declined to comment on the reports of Libyan involvement.

Recently returned from a trip to Egypt, Cannistraro also said "there is evidence" that indirectly connects the Oct. 12 assassination of the speaker of Egypt's Parliament, Rifaat Mahgoub, to Iraq.

He said the killing was apparently carried out by the Egyptian Islamic Jihad, a tightly knit, fundamentalist group led by an elderly sheik, but he said there was "some apparent contact between Iraqi military intelligence and the sheik" and "some funding and support" for the group from the Iraqi government.

Cannistraro said "the general assumption" at the moment is that Iraqi President Saddam Hussein does not want to provoke the United States into war through a terrorist operation. "However," he said, "that has not restrained Iraq from trying to fish in troubled waters," including Egypt, a strong U.S. ally in the confrontation with Iraq over the Aug. 2 invasion of Kuwait.