  A systematic calculation of nuclear matter is performed which includes the
long-range correlations between nucleons arising from one- and two-pion
exchange. Three-body effects from $2\pi$-exchange with excitations of virtual
$\Delta(1232)$-isobars are also taken into account in our diagrammatic
calculation of the energy per particle $\bar E(k_f)$. In order to eliminate
possible high-momentum components from the interactions we introduce at each
pion-baryon vertex a form factor of monopole type. The empirical nuclear matter
saturation point, $\rho_0 \simeq 0.16 $fm$^{-3}$, $\bar E_0\simeq -16 $MeV, is
well reproduced with a monopole mass of $\Lambda \simeq 4\pi f_\pi \simeq 1.16
$GeV. As in the recent approach based on the universal low-momentum
$NN$-potential $V_{\rm low-k}$, the inclusion of three-body effects is crucial
in order to achieve saturation of nuclear matter. We demonstrate that the
dependence of the pion-exchange contributions to $\bar E(k_f)$ on the
''resolution'' scale $\Lambda$ can be compensated over a wide range of
$\Lambda$ by counterterms with two ''running'' contact-couplings. As a further
application we study the in-medium chiral condensate $<\bar q q >(\rho)$ beyond
the linear density approximation. For $\rho \leq 1.5 \rho_0$ we find small
corrections from the derivative $d \bar E(k_f)/d m_\pi$, which are stable
against variations of the monopole regulator mass $\Lambda$.
