They had paused together in the midst of the wreckage with glass crashing around them and sirens wailing and the crowd darting like a school of frightened fish. A small clearing had formed near the flaming police cars, and in it the two slender men stood alone, silhouetted by the firelight, kissing.

The City Hall Riot, as it was christened last week, was sparked by the Dan White verdict, the voluntary manslaughter ruling for the seemingly pleasant baseball player and former cop who carried a loaded gun into City Hall and killed the mayor and reloaded his gun and killed the gay supervisor. But even as the windows smashed and the police cruisers went up in flames, you could hear gays say that they knew this would happen, that a rage had been growing on the streets, fueled by beatings, by anti-gay graffiti.

Maybe some kid could write "Kill All Queers" on a bathroom wall in Topeka, and get away with it, but not on gay turf.

So when they massed on Castro Street the following night, filling a full block for a quiet memorial birthday tribute to the slain supervisor, Harvey Milk, a speaker on stage asked into the microphone:

"How many of you are from somewhere outside of San Francisco?"

From one end of the crowd to the other, the arms shot up: Thousands of sleeves, denim and leather, raised in a sudden mass salute.

Scenes form a city under strain:

Ellen, just back from several years in New York, goes apartment-hunting in the neighborhood where she grew up. There is a small, secret street there, a flowery place newcomers never find, and back behind the fuchsia bushes Ellen sees a wonderful cottage being remodeled.

"When will it be ready?" she asked the carpenter.

"Six weeks," he says. "But I'll be honest with you. They only want to rent to gays."

Friends talking, straight woman to gay man: Do you like that feeling, that walking on your own turf? Gay man: "I've been in situations where it does feel good. I'm just as much a part of being a put-down queer as any other. Yeah. That rebelliousness does feel good. You rejected us plenty - now it's our turn. Get the - out."

If there is a national parlor into which gays step when they emerge from the closet, it is arguably this small and traditionally generous city, now said to harbor a higher percentage of homosexuals - standard estimates range as high as 25 percent, or 175,000 people - than any other in the nation. There is no other crossroads in the world quite like the intersection of Castro and Market, which is to gay cruising and commerce as Wall Street is to banking.

Raw tolerance - the acceptance, in principle, of some sex - is no longer the issue here.

Uneasily, like 1966 white liberals who discovered that those oppressed blacks wanted to live right in their subdivision, we are stumbling onto the next question: Now what do we do?

Gays have filled whole neighborhoods. They can be clannish or snobbish. They work in restaurants, business and city government. They have organized politically, with as much clout as any San Francisco minority - some say more. They walk close together kiss occasionally on street, touch, smile, hold hands, behave like heterosexuals. They are helping transform the city, visibly; much of San Francisco's Victorian housing renovation boom, with attendant speculative buying and tenant displacement, has been helped along by gays.

They are here to stay, just as the Irish, the Italians, the Chinese and Japanese and blacks and Filipinos and Mexicans all stayed - even in the face of sometimes violent discrimination. When police at the City Hall Riot finally broke rank and ran after gays, shouting. "We're going to take back the city," what they forgot was that San Francisco was not the city of Dan Whites and WASP policemen any more than it is the city of odd ethnic mishmashes.

Its history is Americana, compressed in time by the sudden gifts of the gold mines: All at once, from from piled-up sand and general stores, an instant city burst out of the promise of easy wealth and a new life. The strangers came to take what they could get.

Harry Britt, the gay supervisor who filled Harvey Milk's seat, calls San Francisco's homosexuals "the newest emigres from hostile shores."

Many San Franciscans, particularly ethnic minorities, take offense at that analysis. But it is possible, over time, that those "hostile shores" will grow less hostile. If there is any large social lesson to be learned from the new Masters and Johnson report, a straightforward account of gay sexuality, and the remarkably sympathetic Time cover story that heralded it, it is this: We are beginning, as a nation, to tolerate and perhaps even understand homosexuals' need to live without personal fear. Washington, D.C. has already outlawed anti-gay discrimination and included the gay vote in the standard list of political necessities.

Still, no city in America has yet had to cope, day by day, with such a large and visible homosexual population.

It is not an entirely simple process, this coping. We are asked to accept not only personal sexual preference, but also a public way of life that seems to some non-homosexuals to be incomprehensible, exclusionary, mocking of women.

What follows are excerpts of recent conversations with gay and straight San Franciscans, an exploration of the tensions of daily life in this city that keeps getting called the Gay Mecca.

The interviews with Harry Britt, "David" and "Peter" took place before the Dan White verdict and its aftermath; the others followed it. 'They Are Human'

Peter is 17 and straight. He is tall, slender, attractive and his route to high school takes him past Polk Street, which predated Castro as the city's gay center, and still remains heavily homosexual.

"In seventh and eighth grades, when you begin to see a lot of them, you realize - even if it may not sort of sicken you, but just turn you off - it changes your perception of homosexuals. You see that they are human, that they run businesses, that they live, and all that."

How does he react to a homosexual pass?

"I think there's this fear that if you just say, 'No' politely they'll think you're gay - or that you'd would do it but not with them. You have to go. 'YUUGH!'" He says the incidents pass quickly. But there are moments when what seems to him the sudden, impersonal nature of a gay pass makes him angry.

"He's infringing on my world," Peter says. "When they do that, it feels like it gives me a right to be more violent about it than if a person was seducing me in a way I understood.

"Intellectually, I have gotten over any real objections to homosexuality. But I don't like the way they dress, the mannerisms, which seem almost designed to be offensive. It grates on you, it really does. When someone comes up to me and he's a homosexual, fine, I'm kind of wary, because I don't know where I stand with him.

"But some guy on the other end of the phone with his effeminate voice - I mean, when he lived in Wisconsin he didn't talk like that! He came to San Francisco and he started wearing tight jeans, the hiking boots, the key chain that can be worn either to the right or to the left, the lumberjack shirt, usually red, pretty tight.

Peter is talking faster now, and his voice is rising: "The thin physique, the gold earring, the hair which is trimmed close, and there's a little bald spot usually, and the neat beard. It takes away their sense of individuality and puts them in a lump group as homosexuals.

"The whole goddamn thing is a defense mechanism, and I don't know why they have to have a defense mechanism when this is the most tolerant city for homosexuals in the world."

Peter pauses. Then he says, slowly, "I mean, I can sit here and be liberal about it, but when I'm working [in a taco house] and I'm trying to close up, and these two guys come in and they start necking at the cash register, I think: 'Goddamn faggots, get out of my --ing store.'

"Because it seems like they're just throwing it in my face.And when I'm under a lot of pressure, of course, and I have to take it, it just makes the whole thing worse." Freedom on Castro Street

"There isn't any such thing as intellectual tolerance," says Harry Britt, growing a little angry. "You're either threatened by me, or you're not. If you're threatened by me because I'm a black or I'm gay, then I'm not interested in any position papers you may have drawn up on tolerance."

At 40, Britt is the supervisor from the election district that includes Castro Street. He was appointed to his seat by Mayor Dianne Feinstein in January, two months after Supervisor Harvey Milk was shot to death in City Hall.

Britt (who is white) is a former Methodist minister from Port Arthur, Tex., which he has called "as macho a place as there is on earth," and his voice is still slightly souther. Like Milk, he is openly gay - Feinstein made it clear during the emotional weeks after Milk's death that she would appoint a homosexual to replace him. But Britt will apparently be challenged in the 1980 elections by at least one straight person, who points out that Britt's district is still believed to be at least 65 percent heterosexual.

"Those kinds of words," says Britt of Peter's comments about gay passes, "are much more commonly spoken by attractive 17-year-old girls who constantly have to deal with being treated as a sexual object. They should deal with it the same way the girls do. To turn on all faggots for it is not appropriate. I don't do that, and I don't want to be judged as part of a class for doing it."

Particularly if it happens on Polk or Castro Street, Britt says, "You've got to understand that we feel we have a certain freedom there that we don't have on [another street].

Is that fair? Is it fair to create two neighborhoods where some heterosexual men feel they cannot walk comfortably, and where men "cruise" - look for sexual encounters - with an openness that upsets some more sexually conservative people?

"Where exactly are we supposed to go?" Britt demands.

"Men have been cruising women since the beginning of time," he says.

And to those offended by the climate on Castro Street, says Britt, "I would just have to say, 'If you can't handle it, you guys go.'

"America is a place where pople come when they do not feel comfortable in other places," Britt says. "Certainly the Irish know that. We happen to be the newest group of emigres from a hostile shore." 'Wall-to-Wall' Gays

"People who have been here a long time remember when Castro was not a gay community - when Castro was a very nice, working class, family community," says Al Borvice. "Almost in a blitzkrieg, that whole community got wiped out."

Borvice is a Hispanic attorney, the coordinator of a Hispanic law and community center called Al Raza Centro Legal. Most of his clients live in the Mission District, the predominantly Hispanic neighborhood named for San Francisco's 203-year-old Mission Dolores. Just northwest of the district lies Castro Street.

"What we're faced with - a lot of residents who are not in any way anti-gay, or who do not want to be persecuting gays - we're just looking at the reality, looking at a San Francisco with an entire inner city of wall-to-wall gays, ringed by outer neighborhoods with your families.

"The Mission is really kind of a low-moderate - it's not middle class . . . You have not only a takeover of neighborhood, not only of a different ethnic group, but by white people who have a different sexual orientation, which compounds the problem. So you have a festering hate beginning to develop, especially among the young whose relatives are getting displaced.

"So they're looking at a target. They're looking at gays as a target."

A while back a group of gay women wanted to open a bar and cabaret, Borvice says. "In the heart of the bario. We were saying, 'Hey, man, you've opened up bars in other places and we haven't said anything - but not across the street from Paco's Tacos.'

"Man, at 2 in the morning you've got hundreds of youths out there on reds and whites and who knows what else, carrying knives, packing guns - that ain't cool. And they painted it lavender and white . We said, 'Hey, man, that's not reality.'"

The cabaret never opened. "One bar, and we were labeled, boom, antigay."

And the older Hispanic people - how do they feel?

"They don't understand it. Man, they can't comprehend it. 'Halloween used to be for kids,' they say. 'Now it's the gay parade. What is that?' That's what they say. But people have too many problems to worry about gays. How they walk down the street - they don't care any more. People are getting hit too hard with everything, gas, food . . . as long as they don't particularly do that [open homosexuality] in their neighborhood, their street." Real Estate Victims

"It is a matter of economics and not sexuality," says Jim Rivaldo, a gay advertising consultant and housing activist with offices on Castro Street. "I'm willing to work for economic justice for Latinos - all I ask in return is that resentments against gay people for their sexuality are not confused with resentments for whatever economic forces are driving people up the wall.

"Many of us in the gay community are tenants, and as much victims of whatever the real estate market does as anyone else."

It is a fact that banks and insurance companies appear to be paying attention to gay whites after years of ignoring minorities, Rivaldo says, but that is hardly the gays' fault. "That has nothing to do with sexuality," he says.

"You go to any city in the country," Rivaldo says, "and you will see white professionals moving into what used to be inner-city minority neighborhoods." Once-Issue Sermonizers

Idaree Westbrook, 56 and black, spoke at a community meeting a while ago to talk about gays buying up old Victorians in the Western Addition, which used to be all black. A gay newspaper wrote up some of what she said.

Westbrook got a letter from a former friendly neighbor, who is gay, and had read the article. The neighbor called her "a spokesman for bigotry and hate." The neighbor wrote: "You are no better than the fine Christian gentleman I lived near in Alexandra, La., who repeatedly cautioned me to stay away from niggers because they are dirty and have no morals. I found him repulsive and I now find you no less so."

Westbrook sat down and wrote her ex-neighbor an answer. "As far as I'm concerned, you and other white gays are one-issue sermonizers," she wrote, who immediately label anyone who does not agree with your lifestyle a racist, prejudiced or a bigot. You only see one side of the picture - your gayness. .

"You say I'm preaching hate. I am only expressing resentment toward the fact that white gays, most of whom have done little or nothing to enhance the minority struggle, are jumping onto the freedom-fighting bandwagon for what little gain the civil rights movement has brought about. This includes buying up property that displaces black families while not contributing a thing to the black community."

What about that old American song - that each new groups eases out the old one? The Western Addition was not always black. People congregate with their own; an Italian neighborhood turns Chinese; a German neighborhood turns Hispanic; rural blacks came North from the South.

"Blacks," Westbrook says heatedly, "have never had the luxury of pushing out anyone. We don't know what it is to push. We move into one house and they run. We don't have access to money."

Westbrook says of the City Hall Riot: "I can guarantee you, if that had been black people, that city hall would have been a river of blood, and the jailhouse would have been filled. And that's the difference between gays and black people." 'A Citizen's Duty'

David is gay, 39, and runs a counseling service for gay male newcomers to San Francisco. He describes a familiar syndrome he calls "lookism" - an intense sexual competitiveness in the gay community that can shock recent arrivals. Part of it lies in the "uniform," the almost-clone-like conformity in dress which signals gay and attractive simultaneously. And if some people are offended, he believes it goes with the times.

"In part it is a late 20th-century dilemma in a pluralistic society," David says. "There is always a new group coming out, saying, 'We have special needs, and we want to be seen as special and separate and at the same time we want to be included.' Is it duty that we're talking about, citizen's duty to be able to relate to all these people?

"It feels exhausting," David says. "I get tired. I watch the news - 'Oh my God, there's some new group striking, or parading.' How can I relate to all these people that have these legitimate demands?" David covers his face with his hands and shakes his head. "It makes one long for a small town." CAPTION: Picture, Police and demonstrators in front of San Francisco's City Hall last week; AP photo