Anti-Western Legacy Haunts E. Europe Nations : Terrorism: With borders open and illegal arms trade flourishing, there are fears that the region could be a launching pad for attacks.

As Eastern Europe’s new democracies scramble to defend themselves against the threat of terrorism provoked by the Persian Gulf War, the sins of the Communist past have come back to haunt them.

Czechoslovakia, Hungary and East Germany were havens for anti-Western extremists during Communist rule. Fears that the region could become the launch pad for terrorist attacks have been heightened by open borders and a flourishing illegal arms trade.

Thousands of Arab students live in Czechoslovakia and Hungary under exchange agreements that predate the new governments, including 49 Iraqi officers training at the Czechoslovak military academy in Brno.

Suspicious foreigners without permission to live in the region are being rounded up and deported. But authorities in both countries are reluctant to take action that could be seen as a violation of human rights, such as expelling Iraqis or Libyans solely on the basis of their nationality.

Eastern Europe is awash in unregistered weaponry, much of it bought from departing Soviet soldiers or deserters. The soldiers have been selling off ordnance--from grenades to submachine guns--to bankroll their escape or buy coveted consumer goods to take home.

Hungary and Czechoslovakia manufactured some of the most dangerous weapons that extremists now threaten to turn against them, like the Semtex plastic explosives used to blow up Pan Am Flight 103 over Lockerbie, Scotland, in December, 1988.

Slovak Republic officials announced in early January that they would defy Prague’s ban on the production and export of arms to preserve 70,000 jobs that depend on the industry.

Recent discoveries of sophisticated explosive devices serve as troubling reminders that the bomb-makers are still in business.

Plastic explosives were intercepted at Prague’s Slovansky Dum restaurant on Jan. 21. Local media said the Czechoslovak-made Permolex substance and detonators had been intended for sale to unspecified foreigners at the restaurant, which is a favorite hangout of local Arabs.

A suitcase packed with gunpowder was found in a Budapest suburb last week, and Hungary has been accused of the clandestine shipment of rifles to nationalist forces in Yugoslavia.

Security has been stepped up at potential targets in Prague and Budapest, including the U.S., Israeli and Kuwaiti embassies where soldiers and explosives-sniffing dogs patrol around the clock. Czechoslovakia has also stopped issuing visas to Iraqi and other gulf citizens at airports and border crossings, requiring instead that they apply in advance.

“The fact that Czechoslovakia served as a place of refuge for terrorists in the past doesn’t mean that they still remain here. But we can be assured that they know our territory well and could move around here as easily as at home,” said Martin Fendrych, spokesman for the federal Interior Ministry, which oversees a Czechoslovak equivalent of the FBI.

Western intelligence services have provided East European security forces with lists of known terrorists for comparison with the names of foreigners registered in the region.

But there are probably undesirables in the country whose presence is not known to authorities, Fendrych acknowledged. So police are checking the documents for all foreigners of Middle East extraction and detaining those whose papers are not in order. He said that 41 were ordered deported in a recent crackdown to deter gulf-related terrorism.

Hungarian government officials conceded last year that the previous regime had sheltered the world’s most-wanted terrorist, a Venezuelan-born assassin known as Carlos.

Czechoslovakia gave sanctuary to Red Brigades members, according to Fendrych, and East Germany harbored Red Army Faction extremists and suspects in the 1986 bombing of a Berlin discotheque frequented by U.S. servicemen.

Since unification last October, Germany’s extensive intelligence and security network has expanded to former East German territory, which is believed to ensure more reliable security than ill-trained forces are able to provide in Hungary and Czechoslovakia.

Crime has skyrocketed in both Hungary and Czechoslovakia since their anti-Communist revolutions in 1989, partly because democracy deprives the police of the once-familiar resort of repression.

A rash of anonymous bomb threats has further complicated the fight against terrorism in Czechoslovakia, where police receive an average of five extortion calls every day.

Most are attributed to teen-age pranksters or disturbed adults issuing disruptive but empty threats. Because there have been several bombings in recent months, explosives specialists are dispatched to investigate each warning.

The incidence of such hoaxes is increasing at an alarming rate. There were 127 bomb threats against hospitals, factories, schools and other buildings during the first three weeks of January in the Czech Republic alone, according to Ivo Dusek, chief of the Interior Ministry’s criminal investigation unit.

Authorities have not yet determined the motives behind two explosions in Prague last summer. One in Old Town Square killed a bystander and injured 15 others.

But they say they cannot rule out the possibility that the blasts were committed by terrorists.