More than the contras' future will be at stake this week when President Reagan's latest aid request is weighed on Capitol Hill.

At stake will be the viability of a peace process initiated last summer by five Central American presidents. At stake will be the prospect of broadened freedoms for the people of Nicaragua. And at stake, in a larger sense, will be the future of U.S. involvement in the affairs of Central America.

From the departure of the conquistadors in the 1820s to the fall of Somoza a decade ago, actions by our nation have left a profound mark on the region -- sometimes for the better, sometimes for the worse. The key questions in this week's debate will turn not on whether the United States is to remain involved in Central America but on the nature and the objective of that involvement.

Is it consistent with our values, our traditions and our aspirations? Does it meet the kind of standard that garners the respect of our democratic allies around the world?

Or, alternatively, does our involvement harken back to another era -- the era of gunboat diplomacy? Does it endeavor to dress up the threadbare doctrine of Manifest Destiny in the rhetorical silks of the Cold War and of East-West confrontation?

The policy we have pursued since 1981 has not served our interests. And it has not brought about the democratization in Nicaragua that we all seek.

There is change for the better in Nicaragua -- less than I would like, but nevertheless a dramatic improvement in civil and political rights. That change dates from Aug. 7 and the signing in Guatemala City of the Esquipulas II accord. The previous 6 1/2 years of contra support, at a cost to U.S. taxpayers of hundreds of millions of dollars, yielded only war and repression.

Contra aid didn't reopen the antigovernment newspaper La Prensa; the Arias plan did. Contra aid didn't create a forum for political reconciliation, headed by a key Sandinista opponent, Cardinal Miguel Obando y Bravo; the Arias plan did. Contra aid didn't secure the release of a thousand political prisoners, with the likelihood of many more; the Arias plan did.

And contra aid didn't initiate direct cease-fire negotiations, or lift the state of emergency, or produce the decision to allow an independent commission to monitor Nicaraguan compliance with a regional peace process. The Arias plan did. And it will do more if we just give it a chance.

The president's aid request does not give the plan a chance; it dooms it. It defies the wishes of our allies in the region, encourages continued warfare and discourages the Sandinistas from extending political reforms.

Much has been made of the administration's "compromises" in fashioning this new package. We hear of the sharp reductions that have been made in overall cost, of the relatively small portion devoted to "lethal" assistance, of the funds held "in escrow" for a month to give the peace process more time to work.

Would that it were true. The $36 million advertised as the total cost is vastly understated; up to $27 million more would be earmarked for repairs or replacement of damaged supply aircraft and for air defense systems. On an annualized basis, the cost would exceed last year's contra package by more than 50 percent.

Characterizing the bulk of the assistance as nonlethal is particularly misleading. This is not a package of tents, bandages and bologna sandwiches; it's helicopters and other hardware essential to guerrilla warfare. And the lethal aid is "escrowed" because U.S. and contra bases throughout the region are already well stocked with arms and ammunition, more than enough to fuel the war while the escrow clock runs out.

The choice facing Congress this week may be difficult, but it could not be clearer.

For the last six months, some of my colleagues believed it was possible to both support the Esquipulas II accord and favor further aid to the contras. That is possible no longer.

We have reached the final hour of our seven-year debate on how best to bring stability and democracy to Central America. We can continue to fund the contras -- and risk the collapse of the peace process, the reversal of gains made inside Nicaragua and the prospect of endless war within and along its borders.

Or we can heed the advice of Nicaragua's neighbors, our democratic allies, and unequivocally support the one approach to Central America's problems that has actually yielded results.

It is the Arias process that has brought Nicaragua closer to full democratization and allowed the first steps toward reconciliation in El Salvador and Guatemala.

It is that regional peace process that is our nation's best hope for ensuring stability and, over time, democracy throughout Central America. To now undermine that process and affront our allies with further contra aid would be a mammoth tragedy -- recalling the worst chapters of our nation's history in the region rather than the best.

The writer, a Democratic senator from Connecticut, is a member of the Foreign Relations Committee. BY AUTH FOR THE PHILADELPHIA INQUIRER