Each night, the streets of this town are filled with fire, and the pungent smell of burning wood and rubber floats among the small cement huts on a dense blanket of smoke.

Shirtless youths, their heads covered with paper bag masks, tend piles of smouldering old tires and brush placed at intervals along the main thoroughfares. The fires cast an unearthly glow on their dark, sweat-slick bodies, and turn the village into vision of hell.

Every few minnutes throughout the night, the sound of a nearby bomb or gunshot punctuates the heavy, purposeful silence.

The villagers say the fires and the homemade bombs are a form of vigilance, a remembrance of the dead and a warning to the Nicaraguan National Guard to stay out.

For five months now, Monimbo, an Indian enclave of 12,000 on the edge of the decaying city of Masaya 20 miles south of Managua. Nicaragua's capital, has been the symbolic center of the rapidly growing popular insurrection against the government of President Anastasio Somoza. Its name is shouted at protest rallies throughout the country, and undergrounf guerilla lovers vow that they will be married in Monimbo after their victory.

Last October, Masaya was one of three widely spaced cities where the Sandinista National Liberation Front Nicaragua's 16-year-old guerilla movement, launched surprise attacks on military garrisons. The attacks both shocked and frightened the government, which had decided that the long inactive Sandinistas were divided and disintegrating.

Three months after the attacks came the brutal and still unpunished assasination of opposition newspaper editor Pedro Joaquin Chamorro in downtown Managua. The murder jolted Nicaragua's fractious political, popular and guerilla opposition into a partial but still uneasy coalition that has struggled to submerge tactical and ideological differences for the common goal of ousting the oppresive 44-year-old Somoza dynasty.

Since then, violent antigovernment protest, guerilla raids and clashes with the National Guard, Nicaragua's joint army and police force headed by the president's brother, have recurred throughout the country.

It was not until the end of February, however, that Monimbo took to its fiery barricades. Forty days after Chamorro's death, as citizens left a mass in his honor, they were met with tear gas and a rifle attack by the Guard.

Estimates of the number killed in the attack range from 40 to 200. The villagers say whole families were herded into National Guard helicopters and haven't been seen since. The Guard said the attack was provoked. The truth probably lies somewhere in the middle.

The Masaya National Guard garrison, in charge of Monimbo, is located at the bottom of a hill leading south into the Indian slum area, at the edge of Masaya's main square. By day, the square steams with the rubble and embers of the previous night's battle. The garrison is surrounded by sandbags and guards, and a tank is parked outside.

One recent night, a car coming from the south attempted to pass through Monimbo into Masaya. Running the gantlet of fires, it was hit by a number of the rudimentary contact bombs the Indians hurl nightly at the garrison walls and at anything that passes through their territory.

The driver of the car, who was hit and died shortly afterward, was identified as a National Guard officer. A retaliatory attack that night killed at least one Indian, caught in his sleep by a random spray of gunfire, and wounded at least a dozen others.

The Garcia (not their real name) family in Monimbo explained why they oppose the Somoza government.

"This is a productive country," the family patriach said. "There is cotton and coffee, cattle and minerals. Yet we have nothing, and we are being killed by taxes. There is no refuge for us here."

The family consists of the patriarch and his two brothers, his wife and their four children. The only ones working are one son, a carpenter's apprentice, and the wife, who has a stall in the Masaya marketplace.

Each morning, the entire family rises at 3 to boil corn that the wife sells. On a good day, she said, she makes approximately $2.50.

A pound of meats costs the equivalent of a dollar, she said, and rice is 25 cents a pound.

Although there are only three bare lightbulbs, and no electric appliances, in the two dirt-floored one-room huts that make up the family compound, and the Garcias turn our the lights for bed at around eight p.m., their monthly electric bill to the government utility, run until recently by the president's uncle, is approximately $4.50.

Water is taken from public spigots and, although there is a sewer system in Masaya, there are no hookups in Monimbo. The monthly water bill is approximately $5.

Although there is a cobblestone road in front of the compound, "We build it ourselves," Garcia said. "In the rainly season, you couldn't pass here before. The people here built it after their regular jobs, fueled on a piece of bread and a cup of tea."

In addition to being angry over abuses by the National Guard, Garcia said, the people of Monimbo object to what he called "a government without a conscience", characterized by conspicuous greed of a president whose personal fortune has been estimated to run to nine figures.

Somoza, Garcia said, "thinks we are stupid, that the people don't understand anything. But we know about his haciendas, about his private airports, the airline he owns, the factories."

Asked about Somoza's charge that the Nicaraguan peasants are being brainwashed by a Communist-dominated opposition, Garcia folded his arms and leaned back in his weather-

"I don't know what communism means," he said. "They say it's a community where everybody is equal."

But Garcia said he didn't really care what kind of government Nicaragua has. "We want only to know that things will change here," he said.