The Southern Poverty Law Center, which tracks racist and right-wing militia groups, estimated that the numbers could run into the thousands, citing interviews with Defense Department investigators and reports and postings on racist Web sites and magazines.

"We've got Aryan Nations graffiti in Baghdad," the group quoted a Defense Department investigator from a report to be posted today on its Web site, www.splcenter.org. "That's a problem."

A Defense Department spokeswoman said officials there could not comment on the report because they had not yet seen it.

The center called on Defense Secretary Donald Rumsfeld to appoint a task force to study the problem, declare a new zero-tolerance policy and strictly enforce it.

The report said that neo-Nazi groups like the National Alliance, whose founder, William Pierce, wrote "The Turner Diaries," the novel that was the inspiration and blueprint for Timothy McVeigh's bombing of the Oklahoma City federal building, had sought to enroll followers in the Army to get training for a race war.

The groups are being abetted, the report says, by pressure on recruiters, particularly for the Army, to meet quotas that are more difficult to reach because of the growing unpopularity of the war in Iraq.

The report quotes Scott Barfield, a Defense Department investigator, saying, "Recruiters are knowingly allowing neo-Nazis and white supremacists to join the armed forces, and commanders don't remove them from the military even after we positively identify them as extremists or gang members."

Barfield said Army recruiters struggled last year to meet goals.

"They don't want to make a big deal again about neo-Nazis in the military," he said, "because then parents who are already worried about their kids signing up and dying in Iraq are going to be even more reluctant about their kids enlisting if they feel they'll be exposed to gangs and white supremacists."

The 1996 crackdown on extremists came after revelations that McVeigh had espoused far-right ideas when he was in the Army and recruited two fellow soldiers to aid his bomb plot. Those revelations were followed by a furor that developed when three white paratroopers were convicted of the random slaying of a black couple in order to win tattoos, and 19 others were discharged for participating in neo-Nazi activities.

The defense secretary at the time, William Perry, said the rules were meant to leave no room for racist and extremist activities within the military. But the report said Barfield, who is based at Fort Lewis, Wash., had said he had provided evidence on 320 extremists there in the past year, but that only two had been discharged. He also said there was an online network of neo-Nazis.

"They're communicating with each other about weapons, about recruiting, about keeping their identities secret, about organizing within the military," he said. "Several of these individuals have since been deployed to combat missions in Iraq."

This article appeared on page A - 9 of the San Francisco Chronicle