Falklands war ends; next step is to pay for it, rebuild relations

''It's all over,'' an extremely well-informed Argentine military source said here June 14.

With a cease-fire apparently in place, surrender seemed imminent and 10 weeks of Argentine military occupation of the Falkland Islands appeared to be coming to an end.

But the bitter consequences of the conflict will be around for years to come.

Moreover, the cost to both nations has been enormous and is bound to grow. As British troops pushed into Port Stanley Monday, Argentina sent its Falklands Army commander, Gen. Mario Benjamin Menendez, to talk with Britain's Maj. Gen. Jeremy Moore. General Menendez asked for the session shortly after noon as advanced British troops poured into Port Stanley.

At least 2,000, perhaps 3,000 Argentine soldiers, had laid down their arms Monday rather than fight a hopeless last-ditch battle for Port Stanley.

The meeting between the two generals staved off that final confrontation, ending the three weeks of savage fighting in which there have been hundreds of Argentine and British casualties, the loss of half a dozen British naval vessels , the downing of at least two-thirds of Argentina's Air Force, and untold losses in the political and diplomatic arena.

It had been a war that brought two long-time friends into a battle that neither wanted -- but that neither seemed able to prevent. The beginning was April 2. But in many ways for Argentina it began 149 years ago when Britain took possession of the islands, ousting an Argentine garrison.

From that time forward, Argentina has sought the return of the islands, which it calls the Islas Malvinas. Most Argentines agreed with the seizure April 2 by the current military government in Buenos Aires, and indeed have been supportive of the 10-week-old Argentine control.

But more and more in recent weeks, questions have been raised here about the wisdom of the original takeover of the islands.

In part, this is due to the cost of the venture. Few nations have taken such an action when their own economic fortunes were at such a low point. Argentina has the world's highest inflation at 104 percent. Its gross national product fell 5.7 percent in the first four months of 1982, and it is continuing to fall. Unemployment in a nation where joblessness has traditionally been unknown is at least 12 percent. Industry is running at less than 50 percent of its capacity, and business bankruptcies and banking failures are at an all-time high.

This situation is bound to worsen as the cost of the war becomes more apparent. Already it is estimated to have reached $4 billion, increasing the nation's already back-breaking deficit.

For Britain, too, the costs have been devastating. Its defense budget, coupled with the anticipation of spending billions of dollars to replace its badly battered fleet, will mortgage the British economy for many years to come.

But even more, the cost in lost lives, wounded men, and those missing -- on both sides -- is enormous. At least 1,500 lives have been lost, with two-thirds of them on the Argentine side. The final tally is not yet in.

Perhaps the most long-lasting consequence of the war has been the rift between Argentina and Britain, the bitter divisions the war stirred in the Western community, and the sharp divisions in the inter-American system, which have put distance between the US and much of Latin America. For the United States sided with Britain in the conflict, although it early served as a mediator.

The irony for many Hemisphere observers is that on May 1, when the US gave up its mediation efforts and decided to back Britain, Argentina was close to winning its long-sought goal of control of the Falklands. All it needed to do was accept third-party control over the disputed territory while the future of the islanders themselves -- many of them British -- was worked out. Now an Argentine role on the islands is distant at best.

Here in Buenos Aires the mood is more downbeat than ever.

Reverses on the battlefield and now the end of the fighting, coupled with the Argentine loss of the debut match of the World Cup soccer games in Spain, have combined to produce an extreme sense of gloom.

''Papal visit, the only positive thing in three days,'' proclaims the top headline of Ambito Financiero, the Argentine version of the Wall Street Journal, in its June 14 edition.

But Pope John Paul II's weekend visit is already little more than a memory. For a brief 30 hours it was a welcome respite from the harsh realities of South Atlantic war.

Yet right in the middle of the papal visit, British forces in the Falklands were on the offensive. And before the Pope had left Argentina, they had seized most of the heights around Port Stanley, the Falklands' capital.

Maps in Monday morning papers suggested to Argentines just how tight the British noose around Argentine forces encamped at Port Stanley has become.