Unsafe conditions and operating procedures at the Pacific Engineering and Production Co. in Henderson, Nev., led to an explosion and fire last May, United Steelworkers' union investigators maintain.

The blast killed two plant employees, injured hundreds of southern Nevada residents and caused more than $70 million in damage in the Las Vegas Valley.The full report is to be released Thursday during a news conference in Las Vegas, the union said Tuesday in discussing the study's conclusions.

The study contends Pacific Engineering bears primary responsibility for the disaster, but it also cited lax enforcement by the Nevada Division of Occupational Safety and the Clark County Fire Department for allowing the dangerous conditions.

The report, however, does not offer a specific cause for the May 4, 1988, blast.

But it does cite 10 so-called unsafe conditions and procedures that existed at the plant, including improper storage of ammonium perchlorate, use of combustible materials in walls, roadways and insulation, and unsafe plant layout.

Clark County Fire Department investigators reported last July that sparks from a welder's torch began a series of events that led to the disaster.

The fire department study said the sparks started the batch house fire that spread in part because of residual ammonium perchlorate throughout the plant.

Pacific Engineering and Production Co. officials declined to comment on the report until they have seen it later this week.

The company has scheduled a May 3 news conference, but officials will not say what the topic of the meeting will be.

The 53-page union report was compiled by the labor organization's Safety and Health Department, which sent three investigators to the blast site within days of the accident.

The safety specialist who wrote the report, Jim Valenti, will be among union officials at Thursday's news conference, officials said.

Following the explosion, Pacific Engineering began looking for a new site for its ammonium perchlocate plant. The company selected a location near Cedar City, Utah, where the facility is being built.

The plant, which makes an oxidizer for rocket and missile solid fuel, is scheduled for completion this summer.