The walls of the Public Information Office on the Turkish side of this divided island are lined with pictures of mass graves and "Greek atrocities" allegedly carried out during the periodic outbursts of violence that have marked the past two decades here.

On the Greek side of the capital city, the Information Office message is more subtle. Books on "Turkish atrocities" are under the counter. But here they prefer to speak more openly about "colonization," or the influx of mainland Turks from the backward Anatolia region, who are being shipped here to help populate the Turkish-Cypriot section of the island.

The pictures and the pamphlets on both sides reflect what is an over-whelming element of the Cyprus problem - a large and deep-seated dose of hatred and derision on both sides.

The problem, however, is not just limited to the difficulties between the leaders of the island's roughly 515,000 Greek Cypriots and the 120,000 or so Turkish-Cypriots.

It has brought Greece and Turkey - two NATO allies - to the brink of war, split apart the southern flank of NATO along the eastern Mediterranean, damaged American relations with both countries and darkened the career of former Secretary of State Henry Kissinger.

If there is ever to be a solution to the bitterness and what since 1974 has been the complete separation of the island into two camps, it will, in the view of some experienced diplomats in the region, have to come about through both Athens and Ankara reaching the conclusion that their own self-interests demand a solution.

United Nations resolutions, pressure on one side rather that both, or efforts to reconvene talks between tht two communities are not likely to solve the problem under present conditions, in this view. Interviews with officials in the region, moreover, yield no cause for optimism.

In mid-1974, a group of Greek officers supported by the Athens military regime and favoring union of Cyprus with Greece overthrew the Cypriot government of Archbishop Makarios. The coup provoked an invasion by Turkey in the name of protecting the Turkish-Cypriot population. The invasion in turn led to the collapse of the military regime. A second Turkish invasion a month later solidified Turkish control over almost 40 percent of Cyprus though the Turkish-Cypriot populations is only 18 percent.

The U.S. Congress slapped an arms Embargo against Turkey for using U.S. weapons in its invasion trying to pressure Ankara to withdraw its forces and make concessions on a settlement. Turkey has refused, argument that the United States sells weapons all over the world and that Turkey is the only ally ever punished, an argument that has taken on added weight since the Israeli invasion of southern Lebanon last month.

President Carter, in an effort to shore-up NATO and perhaps make it easier for the Turks to make new proposals without being viewed at home as knuckling under to pressure, is seeking to lift the embargo.

The Turkis did submit new proposals but they are widely viewed as offering next to nothing.Now, a new situation is evolving that could backfire on everybody.

In the view of experienced officials in this region, the Greek-cypriots will never get what they want from the Turks via negotiations, so they tend not to want to negotiate. Moreover the Greek-Cypriots, with 80 percent of the population, will never accept two fererated states, supposedly linked under one government, but with equal power.

The Turks, on the other hand, already have what they want, so they don't want to negotiate. The Turks will never be content with Greek guarantees of security for Turkish-Cypriots.

The Turks, who have not done well with public relations, feel isolated internationally, with no big lobby in Washington nor much aid from anybody.

The practical effects of public relations skill are also apparent in the current battle over the arms Embargo.

The Greeks have been careful not to appear too intransigent and thus alienate their considerable and traditional supporters in Congress. While the Greek-Cypriot leaders have totally rejected the Turkish proposals, they have not slammed the door on U.N. Secretary General Kurt Waldeim, who has yet to decide whether to recommend that those proposals form the basis for new talks between Turks and Greeks in Cyprus.

Turks, on the other hand, may have made a fatal misreading of Congress by concluding that any kind of proposals would do in order to create the image of progress. As the details of the Turkish proposals sink in at capitals around the world and in Congress, however, their thinness is becoming more apparent, in the view of veteran officials.

The end result of all this might mean one more cyprus casulty.

IF the embargo is not lifted, then the Turks will be still more alienated from the United States and NATO. The Greeks will have won a battle in Congress without gaining any concrete result on Cyprus. If the embargo is lifted, Turkey will be happy and Greek would likely experience another - this time stronger wave of anti-Americanism.

The only man who can come to the rescue, in the view widely held among diplomats, is Turkish Premier Bulent Ecevit, if he subits more far-reaching proposals and concessions before the congressional vote.