NEWS ANALYSIS : Once Again, Effort to End Salvadoran Civil War Stalls : Central America: Renewed fighting, both in the field and the political arena, dashes hopes for an early cease-fire.

TIMES STAFF WRITER

Chances for an end in the foreseeable future to El Salvador's 11-year civil war seem to be swamped by a rising wave of bloodshed and internal squabbles on both sides that have brought peace negotiations to a confused stop.

With no new talks scheduled, the conflict has grown bloodier in recent weeks. New tactics by the army that have seen the war spread over greater parts of this Massachusetts-sized country have brought heavier fighting and mounting casualties.

And there are indications that at least one of the five groups that make up the rebel Farabundo Marti National Liberation Front (FMLN) is beginning to operate on its own. That has worsened existing dissatisfaction by large elements of the guerrilla rank and file with the willingness of its leadership to give up arms and land in a settlement.

The rebel dissension is matched on the government side by a division in the ruling Nationalist Republican Alliance party, known as Arena, over whether to implement a series of political and economic reforms agreed to in earlier stages of the peace talks.

Pockets of resistance also remain within the army over a tentative agreement to reduce the size of the military after a cease-fire.

"All of this has brought the (peace) process to its knees, and it was always a chancy prospect at best," said a Western diplomat.

Talks between the government and the rebels had resulted in minor but encouraging agreements and gave rise last spring to predictions by both sides that a full cease-fire could be reached by this fall.

But a negotiating session announced by the rebels for Mexico last week never occurred, and no new talks have been scheduled. Special U.N. negotiator Alvaro de Soto indicated that neither side had anything new to bring to the table to move the process.

While the peace talks appeared to be dissolving into a morass of political uncertainty, the fighting has increased.

In a two-day period this week, for example, at least 28 soldiers and guerrillas were killed in a single battle, according to the government. Three days earlier, the FMLN killed 30 government troops, wounded 27 and captured 14.

Although the rebels are inflicting heavy casualties on government forces, it is the army that is on the offensive. According to military experts, it is entering the final stage of a four-month offensive targeting the rebels' command and communications structure and their supply and logistic system.

The goal, military sources say, is to reduce the FMLN's fighting ability and to reduce the territory held by rebels in advance of a cease-fire. As a result, there is regular, brutal fighting throughout the eastern two-thirds of the country. Casualties in the first half of August totaled at least 140, by the accounts of both sides.

As a counter, military experts say the guerrillas appear to be preparing for a possible major attack on San Salvador, the capital, in hopes of drawing the army from the countryside.

There were signs of this in a series of bombings this week against utility systems in the capital, as well as attacks on dams that provide water to the city.

At the same time, diplomatic and intelligence sources report that the People's Revolutionary Army, one of the components of the FMLN and known by its Spanish acronym ERP, has broken discipline and increasingly is operating on its own.

These sources say the ERP is responsible for some recent kidnapings of businessmen in violation of a human rights agreement that the FMLN reached with the government. The ERP is also blamed for the murders this year of three American servicemen who were killed when their helicopter was shot down in eastern El Salvador.

"This is a dangerous development," said a European diplomat with close FMLN contacts. "If the government senses the guerrillas are falling apart, (it) will lose whatever incentive (it has) for negotiating. And of course it makes it more and more difficult for the FMLN to negotiate in a meaningful war if (it) can't guarantee observance of agreements."

In the face of all these negative factors, there remains a sense that a cease-fire is inevitable, if not this fall then by early 1992. "The country is exhausted," said the European diplomat, "and both sides recognize they can't defeat the other."

Said a military expert: "The army knows it can't depend forever on U.S. military aid. . . . Even if they satisfy Congress (over complaints about human rights violations), the entire U.S. military is being scaled down, and these guys know that their aid will be cut."

On the guerrilla side, the decline of the Soviet Union and the increasingly poor economic situation in Cuba mean less and less aid for the rebels.

All of this, analysts say, means there will be an agreement. Until then, however, most signs point to a very bloody waiting period.

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