WASHINGTON (AP) _ A senator on the presidential commission investigating air terrorism is accusing Federal Aviation Administration officials of covering up knowledge of terrorism warnings posted only for government employees.

Sen. Alfonse D'Amato, R-N.Y., lashed out the FAA during a commission hearing Monday, saying they've ''flunked'' in protecting air passengers.

At the second hearing of the President's Commission on Aviation Security and Terrorism, D'Amato produced a cable showing the FAA knew of warnings issued to U.S. Embassy employees in Moscow prior to the Dec. 21, 1988, bombing of Pan Am Flight 103 over Lockerbie, Scotland, which killed 270 people.

State Department and FAA officials say posting of the terrorist alert in Moscow on Dec. 13 was an error which went against a policy of not warning government officials without issuing general public warnings of a terrorist threat.

D'Amato, one of seven members of the commission looking into the Flight 103 bombing and air terrorism issues, praised embassy officials in Moscow for posting the warning.

''Thank God the ambassador published it because he saved some lives,'' D'Amato said.

FAA security director Raymond Salazar said it has never been shown that any embassy personnel canceled reservations on Flight 103 because of the warning.

''You either are incredibly incompetent or you covered up,'' D'Amato told Salazar, who said he could not recall seeing the Dec. 13 message from Moscow until a copy was sent two months after the Dec. 21 bombing.

The cable acknowledged receipt of an FAA advisory of a threat against Pan Am flights between Frankfurt and New York, which U.S. officials later said proved to be a hoax even though the threat fit details of the Pan Am bombing. Flight 103 began with a different plane in Frankfurt and was en route from London to New York when it blew up.

''Since a number of people from this post will be flying out of Frankfurt in the next two weeks,'' the cable said, ''post plans to issue an internal administrative notice warning employees of the threat.... No recommendation will be made as to course of action to be followed by travelers.''

Monte Belger, FAA associate administrator, said the agency did nothing to stop the embassy from warning government employees even though such a selective warning is against government policy.

Belger told the commission that, in retrospect, he wishes that someone in the FAA had focused on the message and called the State Department to stop the posting of the warning, ''but we didn't.''

FAA senior intelligence analyst Claude Manno, who acknowledged receiving the original message on Dec. 13, said he ''probably shredded it.''

D'Amato said studies by the General Accounting Office indicate that ''the FAA and the present system have flunked when it comes to providing basic security systems that anyone can have confidence in.''

Transportation Secretary Samuel Skinner, in an interview on Cable News Network, denied the assertion, saying, ''The FAA has done a very good job in implementing a number of programs in the last year to enhance our protection.''

Skinner noted a program to install sophisticated bomb detection equipment at key airports, fines against airlines for security lapses and new FAA personnel added to foreign posts.

D'Amato said problems with the FAA suggest there may be a conflict between its role of promoting aviation and that of ensuring passenger safety.

The GAO report said stepped-up security measurers since the disaster may be ineffective at high-risk foreign airports due to a lack of training standards.

Earlier reports found problems with passenger screening, airport security controls and security inspections.