Sri Lanka violence poses severe test for peace plan. Domestic opposition in Sri Lanka and India could weaken leaders' resolve to carry out pact

Battered by spiraling violence, the peace plan to end Sri Lanka's civil war is at a crossroads. Both key parties to the plan - Sri Lanka President Junius Jayewardene and Indian Prime Minister Rajiv Gandhi - are under growing pressure to back away from the peace accord.

Mr. Jayewardene faces a spreading threat from extremists of the Sinhalese majority, who oppose moves to grant autonomy to the Tamil minority. The Sri Lankan leader, observers in the region say, must show a new will to carry out the July 29 accord.

And in neighboring India, Prime Minister Gandhi's policy of sending in Indian troops to disarm the Tamil militants is coming under harsh opposition criticism, and risks losing public support. The Indian Army, first sent to Sri Lanka as a peacekeeping unit of 3,000, has become a fighting force of almost 30,000. Indian casualties are mounting, and political analysts expect Mr. Gandhi to face new pressures to end the fighting and withdraw troops.

``This is a crucial time,'' says Bhabani Sen Gupta, an analyst at the Center for Policy Research in New Delhi. ``There is growing feeling that four months is long enough for an interventionist military force to do its job.''

Mr. Jayewardene is armed with new legislation, passed just last Thursday after three days of intense debate, that gives local autonomy to the Tamils in their traditional strongholds in the country's Northern and Eastern Provinces. Still, many Tamils - as well as Indians - distrust Jayewardene, who is seen as a wily political veteran.

The Tamils have long claimed discrimination by the Sinhalese, who account for about 80 percent of Sri Lanka's 16 million people. Militants have fought the Sinhalese-dominated government since 1983 to demand their own homeland. According to World Bank estimates made public yesterday, the four years of war have claimed at least 7,000 lives, uprooted 500,000 people, and caused more than $2 billion damage.

Sinhalese opponents of the peace plan claim it gives special privileges to predominantly Tamil areas and makes the country a pawn of India. Sri Lanka's Prime Minsiter Ranasinghe Premadasa supported last week's bills. He has said he would oppose, however, any move to combine the overwhelmingly Tamil Northern Province with the multi-ethnic Eastern Province as stipulated in the peace accord.

Jayewardene is under pressure from India to address Tamil objections to the legislation which they contend does not sufficiently protect Tamil rights. Earlier, India had voiced its concerns about the bills but agreed not to press for changes until after they were passed.

Last week, as the Sri Lankan Parliament debated the two autonomy bills, more than 150 people were killed in attacks blamed on Sinhalese and Tamil extremists.

Many Tamils and Indian observers also fear that Jayewardene will drag his feet in resettling the more than 100,000 Sri Lankan Tamils who fled to India in the past four years.

India's support of the returning refugees could help restore Tamil goodwill lost during the recent fighting in Sri Lanka's northern Jaffna Peninsula. During the offensive, which began early last month, Indian troops were accused of killing thousands of civilians and committing atrocities against refugees fleeing the fighting.

Returning the Tamils, however, would put India on a collision course with thousands of Sinhalese who have been resettled on Tamil lands by the Sri Lankan government.

``I feel the accord will blow up [in] our faces,'' observes A. P. Venkateswaran, a former Indian foreign secretary who is critical of the accord.

Observers also say Gandhi's support is becoming shaky as fighting drags on around Jaffna. Opposition members in Parliament have been noisily questioning whether India is becoming bogged down in a long-term war.

More serious, though, could be the loss of public support in the south Indian state of Tamil Nadu, where the government allowed Sri Lankan Tamil militants to be sheltered and armed for four years.

The state's powerful chief minister, M. G. Ramachandran, strongly supported the Indian Army's military offensive launched early last month. Lately, however, Mr. Ramachandran has been urging the Indian government to consider a cease-fire, while pushing the Tamil militants to release 18 Indian soldiers in a show of good faith. Some observers say this may be a sign that Tamil Nadu support is wavering.

``If this military operation drags on for much longer and Jayewardene does not give ground on the Tamil objections, then the Tamil Nadu front will not hold,'' said Mr. Sen Gupta, the New Delhi analyst. ``And if that happens, the prime minister will have real political problems.''

Indeed, some observers say support for Gandhi's military intervention is already eroding as the war costs mount. More than 250 Indian soldiers (and some 900 rebels) have died so far, and the Indian government is spending an estimated $1 million each day to maintain troops in Sri Lanka.