One of the most remarkable elements of China's crackdown on the banned Falun Gong spiritual movement is the large number of military officers and police officials who are being unmasked as members--a development that is causing deep concern within the ruling Communist Party.

Falun Gong's penetration of the People's Liberation Army and Ministry of Public Security--supposedly closed parts of China's Communist system--was a key element in the party's decision to move against the group in its biggest crackdown in a decade, Chinese and Western sources said.

So far, the state-run press has publicly identified only one former high-ranking military officer, Li Qihua, as a member of the exercise and meditation movement that was outlawed two weeks ago. Li, 81, retired in 1987 as chief of the military's central hospital and deputy director of the health department of the military's general logistics department.

But other senior officers were also involved, two sources said today. One member, sources said, was a retired major general who worked as a senior officer in the military intelligence section of the general staff department. He was part of a team of Falun Gong followers who met with Chinese government officials on April 25 as 10,000 of the movement's faithful surrounded the Communist Party headquarters in Beijing. It was that sit-in that prompted China's sweep against the sect.

Several thousand soldiers and officers are also believed to have participated in the Falun Gong movement around the northern coastal city of Dalian, among other areas. And the movement is also known to have strong support among junior officers and foot soldiers near the garrison city of Shijiazhuang, the capital of Hebei province, 150 miles south of Beijing, sources said.

"It's not just that millions of Falun Gong practitioners are party members," said one Chinese source, "it's that many of them work for the security services. That's the really scary phenomenon."

Western analysts say the party's main concern is not with grass-roots members. Its overarching goal is a party-, army- and police-wide campaign aimed at rooting out senior officials who belong to the movement.

Falun Gong practitioners in China and the West argue that the movement has no political dimension and, indeed, for most people it doesn't. "For the old ladies in the park, it was all about health care and exercise," said one Western source who has closely monitored the campaign. "But for the party-military guys it was more sophisticated. It was more nuanced. It was a way to express opposition to the way things were developing in society. It was a political movement of a different kind."

Falun Gong's New York-based founder, Li Hongzhi, advocates many things in his books and lectures. Some practitioners focus on his lectures about ways to cultivate an "orb" of energy in the belly. Others focus on his thoughts about society, corruption, the polluting influence of rock music, sexuality and the scourge of modernism.

In China, a land that has been psychologically rocked by 20 years of economic upheaval, such a critique, when wrapped in the cloak of Chinese martial arts and meditation, proved powerfully attractive to senior officers whose loyalty to the party was less than absolute, sources said.

Another indication that the army is particularly concerned about the movement is that its flagship publication, the People's Liberation Army Daily, has gone after Falun Gong with even more vigor than other mainstream party media. In the past week, the paper has run 36 stories blasting Falun Gong, more than any other mainstream paper. Chief among its accusations are that Li Hongzhi and his colleagues masterminded 307 demonstrations and caused the deaths of 743 people through their "evil" deeds. Stories intimated that Falun Gong was popular at a naval base in Qingdao, among the sailors of the South Sea Fleet, in military academies and other installations.

Western sources predicted that the extent of Falun Gong's penetration into the military would prompt a shake-up at least in its general political department, currently led by Gen. Yu Yongbo. Heads are also expected to roll in the Ministry of Public Security, which is being held responsible for allowing the April 25 demonstration to occur.

CAPTION: Falun founder Li Hongzhi's ideas attracted wayward military officers.