The State Department accused Iraq yesterday of widespread murder, torture and other human rights abuses in occupied Kuwait.

But it also found major shortcomings in the rights records of the United States' three principal Arab allies against Iraq -- Syria, Saudi Arabia and Egypt -- and criticized Israel's handling of Palestinian unrest in the West Bank and Gaza Strip.

The department's annual report on human rights around the world pointed to a near-universal pattern of abuses in the Middle East, ranging from use of terror tactics by Iraq and Syria to suppression of political freedoms in the other Arab countries.

The report said that while democracy and personal liberties flourish inside Israel, Palestinians in the adjoining occupied territories frequently are subjected to harsh and demeaning treatment under the Israeli military's campaign against the uprising, known in Arabic as the intifada, that began in December 1987. The department said that improvements made during the first nine months of 1990 gave way during an upsurge of violence resulting from the tensions of the Persian Gulf crisis.

"Iraq's abysmal record of repression was even more flagrant in 1990," the report on that country said, recounting in detail its flouting "of established norms of civilized behavior" following the Aug. 2 invasion of Kuwait by holding hundreds of foreign nationals as human-shield hostages and engaging in "mass extrajudicial killings, summary executions and widespread arrests and torture of Kuwaiti citizens."

It cited several atrocities reported previously by private rights organizations such as Amnesty International and by Kuwaiti refugees testifying to Congress and the United Nations. These included charges that Iraqi troops murdered scores of premature babies by throwing them out of incubators, systematically murdered handicapped and infirm people, hanged scores of students and dumped hundreds of bodies, bearing evidence of torture and mutilation, at the doors of hospitals.

Among U.S. allies in the region, Syria got the harshest report. The report called the Assad government "an authoritarian regime which does not hesitate to use force against its citizens." It added, "Major human rights abuses -- including torture, arbitrary arrest and detention and denial of freedom of speech, press, association and the right of citizens to change their government -- continued to characterize the regime's record in 1990."

Egypt has a better record, but still was cited for continuing to restrict basic human rights, torturing detainees, holding at least 1,000 political prisoners and persecuting Islamic fundamentalists.

The report on Saudi Arabia said that "the legitimacy of the regime rests to a large degree on its perceived adherence to the precepts of a puritanically conservative form of Islam." As a result, the report continued, there is torture and mistreatment of prisoners, particularly political detainees; severe restrictions of freedom of the press, religion and political practice, and discrimination against women and foreign workers. It added, though, that the huge influx of U.S. and other foreign troops to Saudi Arabia had given some impetus to "positive changes."

Saying that the United States "remains concerned about the continuing violence, death and injuries" in the Israeli-occupied territories, the report said that Palestinian support for Iraq had led to a number of serious incidents in late 1990, including the killing of 17 Palestinians by Israeli police during a riot in the Old City of Jerusalem and a rash of random Palestinian stabbing attacks on Israelis.

It noted an upsurge of politically motivated violence by Palestinians against other Palestinians, and it said that the 165 Palestinians killed by their own people exceeded the 130 killed by Israeli authorities. But it criticized Israel for reacting with travel bans, deportations of Palestinian leaders, administrative detentions, barring of family reunifications, closure of four Palestinian universities and business and resource-use practices that give Jews advantages over Palestinians.

Among other major Arab countries, Jordan, which has tilted toward neighboring Iraq, was cited as posing important human rights concerns because of King Hussein's continuance of martial law, the use of broad police powers, a ban on legally recognized political parties and general lack of political freedom.

Iran, a non-Arab, Islamic country that regards Iraq and the United States as its two foremost enemies, was called "a major violator of human rights. Abuses included summary executions of political opponents; widespread torture; repression of freedom of speech, press, assembly and association; continuing repression of the Baha'i religious community . . , and severe restrictions on women's and workers' rights."