Strategic Kashmir is divided by conflicting loyalties

Lush and awesomely beautiful; prosperous and strategically important; a Muslim state with special privileges within the union of India - all of this is Kashmir.

But the glue that has long held the coveted prize of Kashmir together is beginning to weaken.

Kashmir's Muslims fear that their special status of autonomy within the Indian union - a status that none of India's other 22 states enjoys - will be eroded. Islamic fundamentalists are thus clamoring for a plebiscite on ''self-determination.''

Militant Hindus in the state, on the other hand, are reacting by demanding stricter central government control.

The recent election campaign and the strong gains by Prime Minister Indira Gandhi's Congress Party have stirred up these old feuds.

The results of last Sunday's election for the state assembly show that the ruling, Muslim-dominated National Conference Party has retained power in this internationally sensitive corner of the subcontinent.

With more than two-thirds of the returns confirmed, National Conference won at least 31 seats in the 76-member assembly. It is expected that most of the undeclared seats, including those where a re-vote is being held, will also fall into the ruling party's camp.

Even so, Mrs. Gandhi's Congress Party doubled its representation from 11 to at least 22.

In the aftermath of the election, the political aspirations of the fundamentalist Islamic groups and those of the militant Hindu fringe will require mediation by the new government. The demands of these groups have deep, historic roots.

A mountainous never-never land sandwiched between Afghanistan, the Soviet Union, China, and Tibet, Kashmir was a prize that both Hindus and Muslims were vying for long before the British left in 1947. As a princely state, Kashmir was entitled at the time of partition to choose whether it would join India or Pakistan.

But no sooner had Kashmir's Hindu Maharajah begun consulting his aides than the Muslim inhabitants of the Punch-Mirpur region of Kashmir, which adjoins Pakistan, revolted. The rebels set up their own ''azad'' (free) Kashmir government and sought assistance from the government of Pakistan to ''liberate'' the rest of Kashmir.

In October 1947, two months after the partition of Pakistan and India, armed Pathan tribesmen poured across the border from northwestern Pakistan. The maharajah panicked and, although 77 percent of his subjects were then Muslims, he ceded his principality to the government of India.

Fourteen months of war between India and Pakistan followed. By the time the United Nations succeeded in arranging a cease-fire in January 1949, India held two-thirds of the territory; Kashmir had been given special autonomous privileges within the India union. A UN demand for a plebiscite to determine Kashmir's future status - a demand discounted by India, supported by Pakistan - was never acted on.

Thus, this extraordinary mosaic - 75 percent Muslim, the rest Hindu, Buddhist , and Sikh - continues as one of the world's unresolved international problems. Its UN observer mission, still guarding the 500-mile ''line of control,'' is the international body's oldest continuous military mission posted in a trouble spot. But its mandate is limited and it was unable, in 1965 and 1971, to prevent yet other, costly Indo-Pakistani wars.

In an interview with the Monitor, Chief Minister Farooq Abdullah skirted the controversial issue of a plebiscite. He charged that both Congress Party governments and now Prime Minister Indira Gandhi's Congress Party (I) have eroded Kashmir's autonomy, stripping the state of many of the constitutional prerogatives it should enjoy. Still, said the politically moderate Muslim, speaking on the manicured lawn of his home, ''I have no doubts that I'm part of India. But there must be safeguards for my people's rights.''

The chief minister is a medical doctor who spent 15 years in England and has a British wife. Asked about the call for ''self-determination'' and a statewide plebiscite advocated by his new political ally, Molvi Mohammed Farooq, he leaned back in his chair and rolled his eyes. He called it a political improbability. The ''Mulanah,'' he explained, speaks for himself.

Some 25 kilometers away, on the placid banks of the sanctuary of Nagin Lake, the young (in his 30s) Molvi Mohammed Farooq, Kashmir's supreme Muslim religious leader or ''Mirwaiz,'' challenged the contention that there is no longer a Kashmir dispute.

''We have United Nations observers, there is a cease-fire line, there have been scores of resolutions before the UN. How can they say the issue is dead?'' he thundered in an interview.

''. . . I will not let the people's movement die. India miscalculated,'' he said with a smile. ''It thought when the sheikh (the former Kashmir leader, Sheikh Mohammed Abdullah) died, the movement died. But I am telling India, the movement lives on.''

As head of the Jamia Islamia Mosque, largest and richest in the valley, the Molvi is said to have controlled some 150,000 to 200,000 votes in this week's election. By entering an electoral alliance with the National Conference, he buried a 45-year-old feud that erupted between his uncle - who subsequently became the president of Pakistan-held Kashmir - and the venerable Sheikh Abdullah. The sheikh's supporters adopted the symbol of the lion in 1938 and relegated to the Mirwaiz's followers the logo of the goat.

Wearing dark glasses, a flowing ''choga'' robe, and the woolen, peaked cap popularized by Pakistan's founder, Mohammed Ali Jinnah, the Molvi called for immediate talks between Kashmiri leaders on both sides of the divided frontier between Indian and Pakistani portions of Kashmir.

Belying authoritative reports that Pakistan is channeling financial assistance to his Awami Action Committee, the Molvi spared no criticism either for Mrs. Gandhi or for Pakistan's leader, Mohammed Zia ul-Haq. ''When Mrs. Gandhi speaks to Zia, she does not represent the attitude of Kashmiris, nor does he represent the other side of Kashmir. How dare they discuss the present cease-fire line as a permanent border? This is something that no Kashmiri will ever respect.''

How would the Molvi himself vote in a plebiscite on uniting with Pakistan?

''Certainly not for India'' was all that he would say.According to the learned old men of Kashmiri politics, the 6 million people of this eclectic land want to be independent. They always have.

''But,'' said an influential leader, ''more serious-minded people now see that this just is not possible, considering our borders and size. We were once independent - for a few hours in 1947 - and look what happened then.''

With a 100,000-man regular standing army guarding Kashmir's strategic passes and precipitous mountain peaks, India is not about to relinquish its emotionally charged prize.

For above and beyond its geopolitical importance, Kashmir is a mirror for Muslim aspirations within a Hindu nation. Though it has only 4.6 million Muslims - there are 80 million throughout India today - it is the nation's only Muslim-majority state. Thus, the whole concept of a secular India would be threatened by its loss.

''If Kashmir would opt to go to Pakistan,'' a Muslim sage said, ''we in India would be in danger of becoming a Hindu (nation). The Muslim minority throughout India would feel threatened, and there is just no way that we are prepared to sacrifice 80 million Muslims to satisfy Pakistan.''