Moderate Iranians trying to repair Iran's shattered foreign policy after Ayatollah Ruhollah Khomeini issued a death decree for British author Salman Rushdie appear to be gaining on unpopular hard-liners, Western diplomats and Arab government officials said Saturday.

But reports that Islamic fanatics already were mobilizing to kill the author of "The Satanic Verses," branded as blasphemous to Islam, indicate moderates were having difficulty reversing Iran's isolation after Khomeini's edict Tuesday."Iran's isolation is hurting moderates, such as (Parliament Speaker Hashemi) Rafsanjani and (Foreign Minister Ali Akbar) Velayati, who want contacts with the West," said an Arab government official who asked not to be identified.

"But they're slowly winning the day over the unpopular hard-liners," the official said. "This also happened last summer, when Khomeini eventually called an end to the gulf war" with Iraq.

A diplomatic source compared Khomeini with Soviet founder Vladimir Lenin, saying, "He thrives on crises . . . and regularly has to renew his revolutionary credentials. But this one backfired."

Diplomatic sources said Khomeini undoubtedly expected strong reaction to his edict against Rushdie, "but he probably didn't expect the whole of Western Europe to back Britain and distance themselves from Iran."

They said quick condemnation of Iran from France, West Germany and Italy, and the threat of a unified stance against Tehran from the European Community as Tehran is looking abroad for help in rebuilding its war-ravaged economy undoubtedly "helped the hand of Iranian moderates."

A clear lack of enthusiasm for Khomeini's decree, inside Iran and among Moslem leaders abroad, illustrated the severity of Khomeini's miscalculation, they said.

Moderates, in a commentary on state-run Tehran Radio apparently designed to contain the diplomatic damage caused by Khomeini's edict, said the decree against Rushdie was religious rather than political in nature and was not intended to harm Anglo-Iranian ties.

Experts point out, however, the Khomeini has never distinguished between religion and politics, and that for him they are intertwined.