TO HIS intense embarrassment, Mikhail Gorbachev arrives in Washington having just provided a stunning display of how far democratization has progressed in the Soviet Union. The electoral process that he authored produced a victory for his Politburo colleague-turned-nemesis, Boris Yeltsin, newly elected president of the Russian republic, which is the Soviet Union's largest constituent part. Mr. Yeltsin did it, moreover, over Mr. Gorbachev's strenuous opposition and in direct assault upon his basic policies. Mr. Yeltsin confirms his status as the Soviet Union's leading elected politician. Mr. Gorbachev took office the old-fashioned way, by Communist Party manipulation.

Mr. Yeltsin's personal style has been much criticized in and beyond the Gorbachev circle. The fact remains he has a formidable popular appeal. The Soviet public is not so much asserting as exploring a political taste. The political class, schooled in conspiracy, is only beginning to study open ways. Mikhail Gorbachev's Soviet Union is exploding in new political forms. He himself represents a current combining centralized reform, much accommodation of the bureaucracy and an effort to use and contain popular discontent. Seizing on the manifest contradictions in this approach, Mr. Yeltsin champions more vigorous economic and political reform, ethnic decentralization (favoring in his case Russian nationalism) and a kind of class war pitting the people against party privilege. These tendencies will take years to work out and may well deepen the country's descent into chaos along the way.

American diplomacy will have to come to terms with this process. This means working with the Kremlin, whoever's sitting there, on foreign policy. It also means taking an unexcited, unprovocative view of Kremlin ferment, which will continue for years. The early Bush administration word on Boris Yeltsin's latest leap was that he's an intellectual lightweight and a demagogue. In this way, apparently, Washington underlines its favor for doing business with Mikhail Gorbachev. But Mr. Yeltsin, while he initially seems to promise trouble for Mr. Gorbachev, represents real forces loose in the Soviet arena and could yet bring Mr. Gorbachev and the reform cause some needed support. There's no call to put down an elected leader who has risen through a democratic process supposedly being encouraged by the United States. Washington may end up having more dealings withhim someday . . . thanks in large part to thebold reforming activities of his antagonist, Mr. Gorbachev.