Overpopulated, undernourished and ruled by an increasingly repressive military govenment that sees specters of Marxism around every corner, this Central American republic is moving ever closer to the brink of all-out political and social warfare.

As the closing act of violence in a farly typical week, last Saturday saw the murder here of the fourth Roman Catholic priest to be killed in the past two years.

The slaying of the Rev. Octavio Ortiz and four other persons present in a parish meeting hall was reportedly the work of government security forces looking for guerrillas.

Three days earlier, members of an outlawed peasant activist group, the Unified Popular Action Front, briefly occuied the Mexican Embassy, the Red Cross headquarters and the local Organization of American States office.

Meanwhile, three foreign executives -- two British and one Japanese -- remained among the missing following their kidnaping last month by leftist guerrillas seeking ransom and the release of political prisoners that the government has denied arresting in the first place.

The executive kidnaping toll for the year is six.One Japanese was killed and Swedish and Dutch executives were released following ransom payments.

Within the past two years, El Salvador's foreign minister was kidnaped and executed, ostensibly by guerrillas, and rightist paramilitary groups threatened to kill an estimated 60 Jesuit priests unless they left the country.

In a recently compiled report follow-lowing an investigatory mission here last year, the Organization of American States' Human Rights Commission has charged the government with "numerous deaths" as well as the use of "psychological and physical torture" in secret dungeons, and repression against church and political opponents in its zeal to stem the perceived tide of subversion.

Unlike Nicaragua, a Central American neighbor where a broad opposition spectrum has risen up against President Anastasio Somoza, El Salvador's conflict stems from a system, rather than a man.

"If we tried to overthrow the government here," one political opposition leader said, "it would probably just be a case of a new general replacing the old."

According to the OAS human rights report, and numerous analysts, El Salvador's troubles are based in the extreme social and economic inequities that have been growing here for decades.

Within its Massachusetts-size territory, nearly 5 million Salvadorans scratch out a living in soil that is poor and nearly without natural resources. Traditionally, most of the land has belonged to a small elite and is rented to peasants at exorbitant rates.

In the early 1930s, the peasants rose up in what the landed oligarchy has come to refer to as a "Bolshevist Revolution." Thousands, primarily peasants, lost their lives in the ensuing battles and the end result was the installation of a military government -- backed by the oligarchy -- whose descendants rule today.

Problems intensified following the 1972 presidential election, by allegedly fraudulent means, of army Col. Arturo Molina. His term coincided with the growth of both leftist guerrilla and peasant activist groups that the government now says operate as a unified force.

Traditional political opponents, including the leading Christian Democratic Party, were effectively silenced as their newspapers wer closed, their meetings raided and their leaders exiled. When the Catholic Church took up advocacy of the peasant causes, it quickly found itself tarred as subversive.

There were repeated allegations of fraud during the 1977 election of the current president, Gen. Humberto Romero, too. Yet hopes were raised that the new administration would ease up.

Romero was encouraged by the approval of U.S. economic assistance funds, withheld from the Molina adminstration because of alleged human rights abuses.

Shortly the approval of a $90 million construction loan, however, the new government promulgated the Law for the Defense and Guarantee of Public Order that gave the military virtual carte blanche arrest and detention powers.

As the lovel of violence has increased over the past year, nearly every sector of the opposition. from the guerrillas to the church, has demanded that the law be lifted and prisoners held under it be released.

Sectors of the church, led by San Salvador Archbishop Oscar Romero (no relation to the president) have also charged the government with stonewalling investigations, and at times with complicity in the still unsolved murders of priests.

In a letter last week to the president of the National Assembly -- made up exclusively of members of the government's National Conciliation Party since the opposition boycotted the last election -- Archbishop Romero noted the disappearance of 108 Salvadorans and the detention of 72 political prisoners.

On Monday, the archbishop cancelled all church services for three days, excommunicated the "material and intellectual authors" of Father Ortiz' murder, and noted that "the atmosphere has become saturated with brutality."

The archbishop's fellow Salvadoran clerics are about evenly divided for and against his outspoken opposition to the government. He has repeatedly denounced the use of violence as a means to social change but has called on the peasants to demand their rights.

Paramilitary groups, believed to be supported and directed by the government have threatened the archbishop's life, and anonymous tracts and radio broadcasts denounce him as everything from a Marxist to a criminal.

At least one government paramilitary organization, the 80,000-member ORDEN, operates in the open. Headed by an active-duty army officer, ORDEN recruits Salvadoran civilians in virtually every city and village to spy on their countrymen.

As one rural villager described it, "everybody knowns who the ORDEN people are in the village. We don't deny them our friendship -- they're just trying to get in good with the authorities.

"People join because a member of their family is promised a job... they get to drive without licenses, or carry a gun."

The ORDEN members, who he said numbered about 30 in his village of 5,000, are issued cards and summoned to weekly meeting. They report to the village military commander everything that happens, particularly in church meetings.

In many instances, ORDEN reports are filled with little more than local gossip. Occasionally, however, its members are used as shock troops in battles with peasant unions that the government has outlawed.

Following one such battle last March in the town of San Pedro Perulapan, 30 miles from San Salvador, between organized peasants and ORDEN, a church report listed more than 50 deaths. The government said the clash was peasant-provoked. The church said it included the forced search and evacuation of thousands of peasant homes.

While successive military governments have acknowledged that social and economic problems must be resolved, their programs in that direction have been either weak or quashed by an oligarchy reluctant to give up a share of its wealth.

In 1976, outgoing president Molina proposed a land reform program calling for expropriation of a segment of the country's central cotton-growing territory for redistribution to peasants, but the oligarchy decimated the plan.

The Romero government has now proposed, with the approval of landowning and business groups frightened by increasing violence, a new land reform program. It calls for the voluntary sale of land by large holders, with government financing for purchase and improvements, and resale to peasants or cooperatives.

While the U.S. aid mission here is working on a way to participate, academics at the Catholic University have criticized the program as encouraging speculation and further enrichment of the wealthy is voluntary, and because the low-rent government financing will be made available not to individual peasants but to development corporations and private banks.

In the meantime, the level of violence and tension grows. Even the three separate guerrilla groups, which have claimed responsibility for the kidnapings, argue among themselves in ideological tracts and ransom-paid newspaper advertisements.

At the same time, there are rising suspicions among those who observe rather than participate in the situation that things are even more confusing than they seem. Why is it they ask, that the government has not solved a single kidnaping case, unless perhaps the government itself is kidnaping businessmen in an attempt to increase the fear of guerrillas and thus justify is own acts of repression?

"This is such a small country," said one skeptical former government official, "everybody knows everyone else, and yet they've never solved a single case."

One of the troubles, he noted, is that government actions are not criticized, "since there's no opposition. The only people who are in politics are those who shouldn't be -- the army and the church."