CAIRO -- Iran's supreme leader, the Ayatollah Ruhollah Khomeini, overruling his president and other Iranian moderates, declared Sunday that British author Salman Rushdie must be killed and sent "to hell" for writing "The Satanic Verses," a novel that many Muslims believe blasphemes Islam.

In a harshly worded statement that seemed certain to set the stage for a major conflict with Britain and other Western nations, the 88-year-old Iranian patriarch rejected Rushdie's apology to Muslims on Saturday and said the Indian-born author could "never be forgiven" even if he repents.

"Even if Salman Rushdie repents and becomes the most pious man of all time, it is incumbent upon every Muslim to employ everything he has, his life and wealth, to send him to hell," Khomeini said in a statement released by the official Iranian news agency IRNA.

The Iranian ruler also said that, while it is every Muslim's religious duty to try to kill Rushdie, Iran would also handsomely reward any non-Muslim assassin who got to the author first.

Several Iranian clerics, responding to Khomeini's initial call last week for Rushdie's assassination, have already posted bounties of nearly $6 million on the 41-year-old author's head.

"If a non-Muslim becomes aware of his whereabouts and has the ability to execute him faster than a Muslim, it is incumbent upon Muslims to pay a reward or a fee for this action," Khomeini said.

Khomeini's uncompromising remarks seemed bound to further incite a passionate controversy raging throughout the Muslim world--and, most significantly, even in Iran itself--over Rushdie's critically acclaimed but heretofore obscure novel.

The controversy also seemed certain to increase Iran's isolation, not only from the West but from the Arab world, where Islamic scholars--while sharing Iran's indignation over the book--have condemned its calls for the author's murder.

"Khomeini has the right to condemn the book, but not the man," a prominent Egyptian Islamic intellectual said, echoing a sentiment expressed throughout the Arab world, where the controversy over "The Satanic Verses" has generally been muted.

Like a number of diplomats and other specialists who follow events in Iran, this scholar said that the controversy over the Rushdie book in Iran appears to be rooted more in politics than religion, reflecting an ongoing power struggle within the leadership over the course that the Iranian revolution--emerging as the loser from a long and costly war with Iraq--will take.

This view was reinforced by a number of conflicting signals over the Rushdie affair emanating from Tehran over the past few days.

On Friday, only three days after Khomeini sentenced Rushdie to death, Iranian President Ali Khamenei sought to defuse the crisis by suggesting that the author could be "pardoned" if he repented and publicly apologized for the book.

The following day, Rushdie, who is under 24-hour police protection at a secret location in Britain, issued a statement through his London literary agent expressing "profound regret" for "the distress that publication (of his novel) has occasioned to sincere followers of Islam."

IRNA, in a series of contradictory reactions that appeared to reflect political conflict in Iran, subsequently rejected Rushdie's apology, then accepted it and finally rejected it again.

On Sunday, in another indication of the conflict being waged in Iran, two Tehran newspapers strongly criticized the clerics who have put a multimillion-dollar bounty on Rushdie's life. "To pay one man to kill another man is murder at a premium and not a religiously inspired act," the newspaper Ettelaat said. Alluding to the power struggle, the English-language Tehran Times added that those offering a reward for Rushdie's slaying "were demeaning their religion for the sake of domestic political opportunism."

Radical Strategy Seen

Within the context of this divisive debate, the fact that Rushdie's fate seems to have become suddenly entwined with that of the Iranian revolution has less to do with the religious controversy surrounding "The Satanic Verses" than with what Iran specialists view as an attempt by Iranian radicals to abort their country's gradual reopening to the West following last year's cease-fire with Iraq.

"What is taking place in Iran right now is a struggle between those who want to rebuild the state and those who want to remain revolutionaries," said Fahmy Hueidy, a prominent Egyptian writer on Islamic affairs and an Iran specialist who has just returned from a visit to Tehran.

"The hard-liners, who have been forced to keep a low profile since the cease-fire with Iraq, have found in this (Rushdie controversy) a pretext for inciting the situation," he added.