Why a small Central American country ignites heated debate within the United States; Haig: a critical point in Central American crisis

Arguing for increased foreign aid to Central America, Secretary of State Alexander M. Haig Jr. told the Senate Wednesday that the struggle in that region has reached a critical point.

''I can assure you,'' Mr. Haig told the foreign operations appropriations subcommittee, ''that President Reagan has never rejected the concept of exploring every conceivable means possible to bring about a peaceful and acceptable outcome to the crisis in the region.''

He refused comment on reports that the President had OK'd CIA support for a covert commando operation against Nicaragua.

The biggest Central American recipient of security and economic aid, he said, would be ''El Salvador, where insurgents seek to prevent elections and destroy the economy.'' He also mentioned Jamaica, Costa Rica, and Honduras. In the latter countries, he said, democracy faces twin threats: quickening economic decline and a political-military crisis on their borders from the civil war in El Salvador and the military buildup in Nicaragua.

He rejected the parallel between El Salvador and Vietnam. Without adequate foreign assistance, he said, ''we would not be able to help reduce the economic misery in the Caribbean Basin that encourages domestic violence and external intervention.''