After a 22-month investigation, a federal grand jury here yesterday indicted the former head of Chile's secret police (DINA), and seven others in the bombing death of former Chilean ambassador Orlando Letelier on Washington's Embassy Row.

The indictment of Gen. Juan Manual Contreras Sepulveda, a close associate of Chilean President Augusto Pinochet, was believed to be the first ever returned in the United States against a high official of a foreign country's intelligence agency.

Contreras, two DINA operatives in Chile and five Cuban exiles living in the United States were charged by the grand jury with plotting, carrying out and covering up the September 1976 murder of Letelier, a prominent and outspoken critic of the Chilean government at the time. The explosion that ripped through Letelier's 1975 Chevelle also killed an aide, Ronni K. Moffitt, and injured her husband.

The Chilean government last night announced the arrest of Contreras and two other Chileans named in the indictment. DINA operations director Pedro Espinoza Bravo and DINA agent Armando Fernandez Larios.

In a statement issued by Interior Minister Sergio Fernandez, Chile said all three had been placed under military detention at an undisclosed location.

The Chilean statement came hours after Assistant U.S. Attorney Eugene M. Propper reported that the United States government would ask for the arrest and jailing for extradition of the three. But the request for extradition was expected to touch off a complicated legal proceedings. (Details on Page A10.)

The indictment accuses Espinoaz of ordering the assassination during a meeting in Chile and Fernandez of coming to the United States to spy on Letelier so that the assassins would know when to strike.

The Cubans, members of the New Jersey-based Cuban Nationalist Movement, a militant anti-Castro group, are accused of helping to carry out the bombing.

The 15-page indictment was explicitly detailed because of the cooperation with U.S. authorities of American-born DINA agent Michael V. Townley, who has agreed to plead guilty to planting the bomb.

The indictment outlines with precision the alleged plot that resulted in the 9:30 a.m. blast on Sept. 21, 1976, on the placid Sheridan Circle area of embassies, chanceries and diplomats' homes.

Letelier was killed instantly when the bomb atop the A-frame of his car ripped up through the floorboards under his legs as he drove around the circle. He was on his way to work at the Institute for Policy Studies, where he had become internationally known for his outspoken criticism of the Chilean military regime.

Ronni Moffitt was sitting on the passenger's side of the front seat. She died a few seconds after the blast as she staggered from the shattered, burning car. Her husband, and IPS co-worker. Michael Moffitt, suffered slight injuries.

The Letelier car came to rest against a Volkswagen parked within 100 yards of the Chilean ambassador's residence, and set the stage for a massive worldwide FBI investigation into the first diplomatic assassination here.

Letelier's coworkers, and others in leftist circles, immediately accused DINA, at the time the focus of allegations of massive human rights violations and torture of political prisoners. Of the bombing. They said DINA was concerned about the continuing attention that Letelier was able to focus on the Pinochet regime, and silenced him for that reason.

The FBI, with help from the D.C. Police Department, began the intensive lab work and search of the bomb scene. Its agents began the first of thousands of interviews, weeding out the possiblity of domestic plots and other suspects before focusing on political motivations.

The Justice Department worked out careful alliances with the State Department and the Central Intelligence Agency to allow their cooperation with the investigation. Within a month of the blast, the investigation was centered on the Cuban Nationalist Movement and the allegation by a jailed international terrorist that two CNM members - Ignacio Novo Sampol and Guillermo Novo Sampol - were involved in the plot.

The Novos, known for their firing of a bazooka at the United Nations in 1964 when Che Guevara was speaking there, were brought before the grand jury and questioned. Yesterday's indictment accuses them of committing perjury when they told that grand jury that they did not know anything about Letelier, DINA or the slaying.

A few months later, another Cuban Nationalist Movement leader, Jose Dionisio Suarez Esquivel, was called before the same grand jury and granted immunity from prosecution if he would testify about his alleged involvement in the plot. He refused, and was jailed for contempt of court for 11 months until that particular grand jury's term expired this year.

In February 1978, prosecutor Proper and lead FBI agent L. Carter Cornick decided to make a public request to Chile that the country produce for questioning two men who had traveled to the United States on official Chilean passports and had met with Cuban suspects in the plot.

Chile denied the existence of the two men, but after The Washington Star obtained and published the photographers of the men they were quickly identified as DINA agents Townley and Fernandez.

The United States was able to pressure Chile into turning Townley - an American citizen who grew up in Chile while his father headed a U.S. auto firm there - over to them. Once he arrived in the United States. Townley agreed to plead guilty to one count of conspiracy to murder Letelier. He spent day after day telling FBI agents and prosecutors the additional details they needed to charge others in the plot.

According to the indictment returned yesterday, the plot began in July 1976 when DINA chief Contreras asked the Paraguayan military intelligence service director to authorize the issuance of Paraguayan passports for two DINA agents to use on an unspecified secret mission to the United States.

Contreras then ordered Fernandez to go to Paraguay to meet with that country's military intelligence agency in connection with a two-man mission, about which Espinoza would give him more details, the indictment said.

Espinoza gave false identification materials to Fernandez for the Paraguayan trip to pick up the passports, and Fernandez called Townley to arrange for Espinoza to meet him, according to the indictment.

At a second meeting that month, Espinoza told Townley that he and Fernandez "were being ordered to go to the United States on a DINA mission to assassinate Orlando Letelier," the indictment stated.

After the two men obtained Paraguayan passports, Contreras ordered Fernandez to travel to the United States in August on a DINA mission, the indictment alleges, and Espinoza gave him a ticket to the United States, where Fernandez and another DINA agent arrived on Aug. 26 to begin surveillance of Letelier.

On Sept. 7, 1976, according to the indictment, Espinoza sent Townley to the United States to "carry out the previously discussed mission to assassinate Orlando Letelier."

Townley, using a passport in the name of Hans Petersen Silva, arrived at Kennedy International Airport on Sept. 9 and got the Letelier surveillance information from Fernandez, the indictment said.

Then, according to the indictment, the following acts occurred over the next two weeks:

Sept. 9 - Townley, driving an Avis rental car, went to New Jersey to meet with CNM leader Virgilio Paz Romero and asked him to set up a meeting with Guillermo Novo.

Sept. 10 - Townley met in New Jersey with Guillermo Novo and Suarez and "requested their assistance" in his DINA orders to assassinate Letelier.

Sept. 13 - Townley outlined the Letelier murder plot to members of the governing council of the CNM during a meeting at the Chateau Renaissance motel in North Bergen, J.N. Alvin Ross Diaz, another CNM leader, joined the others at this meeting.

Sept. 15 - Guillermo Novo and Suarez gave Townley and Paz explosives and a remote-control detonating device.

Sept. 16 - Paz and Townley drove to the District and checked into a Holiday Inn in Northeast Washington.

Sept. 17 - Additional wires and other elements of a bomb were purchased by Paz and Townley at a Sears Roebuck and Co. store in Northeast Washington.

Sept. 18 - Novo, Suarez and Ross got additional bomb parts in New Jersey, and Suarez drove to the District of Columbia to join Paz and Townley. Suarez registered at the Best Western Envoy Motel on New York Avenue N.E.

Sept. 18 - Paz, Suarez and Townley constructed the bomb in a Washington motel room.

Sept. 19 - In the early morning hours, Paz, Suarez and Townley drove to Letelier's house in Bethesda, and Townley crawled under the car and strapped the bomb into place.

Sept. 19 - Townley called his wife, Mariana Ines Callegas de Townley, who also was a DINA agent, in Santiago to have her tell DINA the bomb was in place.

Sept. 19 - Townley flew back to New Jersey and was picked up by Ross. They met with Guillermo Novo, and Townley flew to Miami.

Sept. 21 - The bomb exploded, and investigators surmised it was detonated by Suarez, the only member of the assassination team remaining in Washington. Later that day, Townley called Ignacio Novo in Florida and Novo told him that "Something had happened in the District of Columbia." Novo and Townley met in Forida, where Novo was briefed on the mission.

Sept. 23 - Townley flew back to Chile from Florida.

Sept. 24 - "Within the Republic of Chile, Michael Townley advised Pedro Espinoza that the DINA mission to assassinate Orlando Letelier had been carried out," the indictment states.

The indictment specifically charges the three Chileans and four of the Cubans - all but Ignacio Novo - with conspiracy to murder Letelier and the murder of Letelier murder federal statutes, murder of Letelier under local statutes, murder of Moffitt under local statutes, and murder by use of explosives under federal statute. Each count carries a possible life sentence.

Guillermo Novo and Ignacio Novo are charged with two counts each of lying to a grand jury, and Ignacio Novo was charged with failing to tell law enforcement authorities about the crime after it occurred - a federal charged known as misprison of a felony.

Yesterday's indictment before U.S. District Chief Judge William B. Bryant ended 22 months of often pessimistic waiting by Michael Moffitt and others who had closely watched the progress of the investigation.

Moffitt, 27, was sitting in his office at the Institute for Policy Studies when the official news of the indictment arrived.

He said he was "satisified, but there's still more to be done" in terms of seeing how diligent the United States will be in making sure the charges against the Chilean officials are tried.

"I hate to say, 'I told you so.'" Moffitt said, but "we feel vindicated (by the charges against DINA). We knew who was responsible and we never changed that."

IPS staffers, whose leftist think tank was infiltrated and otherwise spied on by the FBI and police during the antiwar years, early in the case publicly doubted the willingness of the FBI and other U.S. agencies to solve a crime against a leftist diplomat such as Letelier.

"It was difficult for a while until there was some kind of trust - not trust in the mushy sense, but respect," Moffitt said. He said FBI agent Cornick and prosecutor Propper are "decent people. Cornick is a damn good cop . . . there are obviously good cops in the FBI and Carter Cornick is one of them. We weren't trying to sell them our whole political program. We just wanted to see justice done."

Moffitt said that he now lives "out of a coffee cup and out of a beer glass and it's no substitute for a marriage.My work (anti-Chilean junta activities) is my life because the junta was responsible for the death of my wife."

He and Ronni Moffitt had been married for four months before the bombing.

Letelier had been imprisoned by the military regime after the fall of Marxist Chilean president Salvador Allende in a 1973 military coup. But after his release from a one-year prison term, he had returned to Washington - where he had served Allende as ambassador to the United States - and built up a strong following in leftist political circles.

His wife, Isabel Letelier, was vacationing in Martha's Vineyard, Mass., yesterday and could not be reached for comment.

U.S. Attorney Earl J. Silbert and his top aides, all of whom were present when the indictment was brought yesterday, praised the investigation of the case by the FBI and its Washington field office. He also commended the work by Propper and Assistant U.S. Attorney E. Lawrence Barcella Jr., the two prosecutors who will try the case before U.S. District Judge Barrington D. Parker.

Ross, Ignacio Novo an Guillermo Novo have already been arrested on Letelier-related charges an are in custody. Paz and Suarez are fugitives, and warrants have been issued for their arrest.