At the Embassy of Madagascar last night the first language was, of course, Malagasy. But most of the guests assembled spoke the language of diplomacy.

Diplomats from Africa and the United States mingled with business leaders and Malagasies celebrating the 100th anniversary of the signing of the Americo-Malagasy Treaty in 1883.

To the island republic, located off the east coast of Africa, the United States today is one of its most important allies--and a source of financial assistance as the country's ailing economy struggles to recover from typhoons that devastated most of its rice crops two years ago.

"We're trying to come from a difficult period in our relations in which our relations were in a deep freeze," said Chester A. Crocker, assistant secretary of state for African affairs. He was referring to the period after the election of President Didier Ratsiraka, who established ties with the Soviet Union.

"But now," Crocker said, "we're in the process of working to restore positive and strong relations."

The reception for Crocker and his fellow Americans was warm. Ambassador Benjamin Razafintseheno gladly broke with his duties in the receiving line to smile and pose for newspaper and television cameras with the assistant secretary, who also happens to be the great-great-great nephew of the original signer of the treaty, then-president Chester Arthur.

All the guests toasted the continuing and amicable relations of the two countries.

"If I could do it, I would speak Malagasy," said Rakotovoa-Razakaboana, a member of Malagasy's Supreme Revolutionary Council, who delivered a message of friendship from Ratsiraka in French. When the translator finished, he raised his glass in a toast to to the two countries.

Razakaboana, who also has served as minister of finance and planning for the Democratic Republic of Madagascar, gave the more than 200 guests a modern interpretation of the historic document. In lengthy remarks, he emphasized his country's independence and its support for a "zero option" to curb the nuclear arms race. He also voiced hopes for continued economic assistance from the United States.

Vernon Walters, U.S. ambassador at large, gave the translator a rest by delivering his remarks in English and French.

"We have taken note of Malagasy's interest in continuing relations and I agree completely with what he Razakaboana said," said Walters. "We will do everything we can to help Madagascar's people raise their standard of living."

"We wish you well in your efforts," said Walters, toasting his hosts, "and will stand beside you."