The 12 Common Market nations said Monday they will recall their ambassadors from Iran to protest Ayatollah Ruhollah Khomeini's order that Salman Rushdie be killed for writing a novel many Moslems say is blasphemous.

The decision in Brussels by the European Economic Community came a day after the Iranian leader spurned Rushdie's apology for offending Moslems with his novel "The Satanic Verses." Khomeini renewed his "execution" order.West German Foreign Minister Hans-Dietrich Genscher said the EEC nations also will require Iranian diplomats in Europe to stay within 40 miles of where they are stationed.

He called the action by the EEC foreign ministers a sign of solidarity with Britain, where Rushdie, an Indian-born Moslem, lives and is now in hiding.

"But it is also a signal to assure the preservation of civilization and human values, the preservation of freedom of speech and expression," Genscher said.

Khomeini indicated Sunday that he will not retract his order that Rushdie be killed. Iranian clerics have put a $5.2 million bounty on Rushdie's head.

Khomeini's decree also named Rushdie's publishers, and copies of the novel have been removed from some bookstores' shelves in the United States and Japan. Fearing attacks, some Western publishers have decided not to print the book.

In Washington on Sunday, Secretary of State James A. Baker III called the death threat "intolerable" and an obstacle to Iran "rejoining the community of civilized nations."

In New York, Roman Catholic Cardinal John J. O'Connor implied that Catholics should shun the work because it offends Moslems, but criticized the death threat. O'Connor said he had not read the book.

President Ali Khamenei of Iran had sought to defuse the crisis over Khomeini's death decree by saying Friday that Rushdie's life might be spared if he apologized and repented.

In an apology issued Saturday, Rushdie said:

"I recognize that Moslems in many parts of the world are genuinely distressed by the publication of my novel. I profoundly regret the distress that publication has occasioned to sincere followers of Islam."

Iran's official Islamic Republic News Agency said at one point Saturday that the apology from the 41-year-old writer was probably sufficient to warrant a pardon, but it later retracted the statement as only the opinion of one of its writers.

On Sunday, IRNA quoted Khomeini as saying: "Even if Salman Rushdie repents and becomes the most pious man of all time it is incumbent on every Moslem to employ everything he's got, his life and wealth, to send him to hell."

Khomeini said the "imperialist foreign mass media are falsely alleging that officials of the Islamic Republic said that if the author of `The Satanic Verses' repents, the execution order against him would be abolished. This is denied, 100 percent."

Neither Khomeini's statement nor IRNA in any of its reports Sunday referred to Khamenei's suggestion of a reprieve, reflecting a widening rift in the Iranian hierarchy over the affair and their country's relations with the West.

Pragmatists in Iran have been pursuing closer ties with the West and help in rebuilding an economy wracked by its eight-year war with Iraq.

The threat against Rushdie has chilled British-Iranian relations, which were restored in November after a 17-month break.

Canada decided Sunday to allow entry of the book after determining it is not "hate propaganda," said National Revenue Minister Otto Jelinek. It had blocked imports of the book after receiving a complaint from a Moslem group.

"The Satanic Verses" is banned in Iran, India, Pakistan, Bangladesh, Egypt and South Africa.

Moslems say "The Satanic Verses" blasphemes their religion by portraying the prophet Mohammed's wives as prostitutes and suggesting that he wrote the Koran, the holy book of Islam, rather than receiving it directly from Allah.

Publishers in France, West Germany, Greece and Turkey have decided not to publish the book, and leading bookstore chains in the United States have pulled it from their shelves.

Japan's top two foreign book dealers announced Monday they will stop selling the book for safety reasons until the furor dies down.

In Yugoslavia, the leading Communist Party daily began printing excerpts of "The Satanic Verses" in today's editions.

The printing of the excerpts in the daily Borba comes on the same day as the arrival of Khamenei on a three-day visit. It is the Iranian president's first official trip to a European country.