The Old Gringo by <i> Carlos Fuentes; translated by Margaret Sayers Peden (Farrar, Straus & Giroux: $14.95; 181 pp.) </i>

The fate of journalist Ambrose Bierce has intrigued literate Americans since 1914 when he vanished in Mexico. Now the celebrated Mexican novelist and short-story writer, Carlos Fuentes, has spun an opalescent novel around that mystery.

Fuentes makes it clear from the beginning that the old gringo’s last adventure was deliberate suicide; he had crossed the border to mingle with a revolutionary army, knowing he would not return. To be stood up against a stone wall and shot was a pretty good way to die, he used to say. “It beats old age, disease, or falling down the cellar stairs.”

The story opens with a squad of guerrillas digging up this eccentric foreigner, whose corpse will be strapped to a desert sled and hauled north to his own country. Gathered about the grave are several people who remember him: Inocencio Mansalvo, Pedrito, a camp follower called La Garduna, Col. Garcia, and the young American schoolteacher Harriet Winslow. They discuss the old man while contemplating his discolored remains--which might not be the most attractive way to begin a story, but the author knows what he is doing. Few readers will roll their eyes and shut the book.

In his 1980 collection of short stories, “Burnt Water,” Fuentes wrote about urchins, whores, decadent gentry and various impoverished ciudadanos riding the florid carrousel of Mexican life. Such characters are unfamiliar to the average book-buying gringo, yet as he delineated them we began to recognize their brothers and sisters in our own backyard or down the street: concupiscent, vital, gamy humans cackling, struggling, weeping and wondering.

Similarly, in “The Old Gringo” he describes people most of us have not encountered, nor will ever see. Who among us has met the feline yellow gaze of Gen. Tomas Arroyo? Who has smelled the dead roses La Garduna keeps pinned to her amiable breast? Who has watched Pancho Villa trotting toward Camargo?--on his head a gold-embroidered sombrero stained with dust and blood:

“Oriental eyes, smiling but cruel, set in a plain of laugh lines; a ready smile, teeth shining like kernels of white corn; a scrawny mustache and three days’ growth of beard; a head that had been seen in Mongolia and Andalusia and the Rif, among the nomadic tribes of North America, and was now here in Camargo, Chihuahua, grinning and blinking and squinting against the onslaught of the light, a head stored with vast reserves of intuition and ferocity. . . .”

It is toward Pancho Villa that the story bends--and toward Villa that much of Mexico bent at a certain time, because a few landowners could not perceive when enough was enough, though their wretched peons knew. Haciendas were burned, owners and deputies hanged; and this was the smoking, bloody, volcanic land the gringo chose to enter. Why? Well, he needed a frontier to cross. Once upon a time in his own country there had been frontiers, but now they were gone. And the frontier of the mind? asked Harriet Winslow. And that of the heart? Gen. Arroyo responded.

Of such questions, which cannot adequately be answered, is this book made.

The old man reached El Paso with a black Gladstone bag containing ham sandwiches, a copy of “Don Quixote”--because in an obscure way this was how he fancied himself--a razor, toothbrush, a couple of books he himself had written, and a Colt .44 wrapped in his underclothes. He bought a white mare, forded the Rio Grande, and started across the desert toward the southern horizon, certain that he would find what he was looking for.

“That man came here to die,” said Inocencio Mansalvo when the gringo appeared.

But first there are things he must prove to himself, as well as to these wild revolutionaries. He must demonstrate skill with a weapon. He must display courage.

Gen. Arroyo accepts this odd norteamericano , skeptically. Born to servitude on the immense Miranda estate, Arroyo now dominates it--the owners having escaped just in time, leaving their private schoolteacher, Miss Winslow, to instruct the children of peons or bake tortillas or do as she pleases. After all, in an emergency one’s obligation is to one’s own skin.

Miss Winslow, utilizing the logic of those who have not been starved or oppressed, believes the Mirandas will return one fine day so that life may continue agreeably. Until such a time, she will attempt to keep order among the ashes of their hacienda.

Around this unique triumvirate Fuentes weaves his tapestry of injustice, betrayal, conceit, machismo and futility.

Arroyo’s army expects to join that of Villa, after which they will ride together against the city of Zacatecas, thence to Mexico City itself. Only first it is necessary to wipe out a few pockets of federal resistance, and along the road we learn what happened to Ambrose Bierce.

Fuentes’ narrative is not always easy to follow; perhaps his convulsive involvement with his native land prohibits that. He writes about desperate individuals who sense the opportunity for a better world, and to represent such people easily might be less than honest.

The translation by Margaret Sayers Peden can hardly be questioned. One forgets that this iridescent, violent, smoky novel was conceived in another language.