Half an hour from downtown Santiago, the Rev. Mark Mengel celebrated a very special mass last April in the parish church, a spare, modern structure filled to overflowing with more than 400 impoverished workers from the surrounding slum.

After reading a sermon written by a group of parisnioners, a sermon that marked International Labor Day by emphasizing injustices suffered by the poor, Father Mengel ended the mass by blessing the simple tools with which his congregants work.

It was a ceremony that Father Mark, an American priest who has dedicated his life to "liberating" Latin America's poor, recalls with satisfaction.

First came two men, bringing to the altar the hammers and saws with which they earn their meager living. Then came two housewives, carrying pots and pans for the priest to bless. Next came two teen-agers who brought their school notebooks for his benediction.

Finally, two men walked down the aisle, their arms outstretched. The congregation was on its feet cheering as Padre Marcos, as Father Mengel is known here, and the two embraced.

It was a symbolic act: the two Chileans represented those in Santiago who have no work, officially 22 percent of the city's population of 4 million who are either unemployed or who work in the government's minimum employment program for less than $30 a month.

"That really had impact," Father Mengel said the other day as he was preparing to don his vestments for a more traditional baptismal ceremony. Those two men with their arms outstretched symbolized a great deal for the people in this parish.

"The workers are poor and the unemployed are poorer. They know that, in Chile today, the only voice to defend them is the church."

Father Mengel is one of thousands of priests in Latin America who over the past 10 years have embodied the Roman Catholic church's relatively recent commitment here to the poor, priests who have lived the "liberation theology" that came under attack during the third conference of Latin American bishops, which ended today in Puebla, Mexico.

Father Mengel, 35, has lived and worked among Chile's poor for almost eight years. He has helped to feed, clothe, train and, in his words, "bring dignity to their lives." He walks among them, day or night, without fear, despite the muggings prevalent in Santiago's poorest sections.

His home has been searched by the police, apparently looking for guns, subversive literature or possibly persons wanted for questioning in connection with labor or political activities. "I have to admit, whenever they have come, they're always been very polite," he said.

Father Mengel also says that he has been photographed at demonstrations in a country where political activism by foreigners can still lead to arrest and explusion.

He admits that "there are times when I've been afraid," especially during the first three years after the 1973 military coup that overthrew the late Marxist president, Salvador Allende.

Why does he continue going to demonstrations and working with families of persons who have disappeared for political reasons, activities that he knows the government views as direct challenges to its authority?

"I just want to be with the people," he answers. "Safety first may be good for an airline but it's not necessarily good for a priest."

Some 80,000 Catholics live in his parish, largely composed of housing projects built during the Christian Democratic government of Eduardo Frei in the late 1960s and the Socialist government of Allende that followed in 1970. Most of the houses have water and electricity, although many of the streets are not paved.

Alcoholism is a severe problem among men and teenagers.Many of the women use tranquilizers to mask the poverty and monotony of their lives. There is crime on the streets and beatings at home due to the economic and social tensions that men often encounter at work or while they are looking for work according to Father Mengel.

Columban priests, from Ireland, the United States, Canada, Australia or New Zealand, live and work in this parish. The current four joke that they are "rent-a-priests," because the Columbans go where they are needed in Latin America and Asia.

Another Columban, the Rev. Tom Connally, said all are committed to the idea "that nobody gives liverty, it has to be taken. This liveration theology is an attitude."

It is a combination of sociology, economics, political science, philosophy and Christian precepts that uses Marxist class analysis as a base for attempting to help the poor, Connally said.

"There are two classes of people, oppressors and the oppressed," he continued. "People up in the States always have truoble understanding this. It's very simplistic, they say. But poor people never have any problem understanding."

Although these priests carry out formal religious functions, it is their social work that occupies most of the priests' time -- their efforts to provide food for those who have none, jobs for those who are unemployed, a Christian framework for families to live together and a political framework for them to understand their poverty.

They insist they are not Communists, as Chile's military government has charged on more than one occasion. "I have certain beliefs I won't compromise," Father Connally said. "The defense of the gospel, the defense of a dignified life.

"The Communists want this repression to continue because it's pushing more and more people toward them. They have no use for the church and the priests. But in the long run, they're going to be here and we're going to be here. They'll have to deal with us just as the military has to deal with us."

In addition to work in their individual parishes, priests like Fathers Connally and Mengel are also involved in citywide church programs designed to call attention to human rights abuses by the government and to help workers understand their rights in a country where labor unions are severely hampered.

Mengel was involved in a hunger strike last year by relatives of persons who disappeared after the 1973 coup, presumably taken away and killed by the secret police because of their political beliefs and activities during the Allende period. Father Connally was arrested during the Labor Day demonstration May 1.

At the behest of Pope John Paul II, the bishops at Puebla tried to reemphasize the church's commitment to the poor in Latin America without condoning direct involvement by the clergy in political affairs.

There is little likelihood that the church in Chile, under the leadership of Cardinal Raul Silva Henriquez who received an award last year from the United Nations for his work on behalf half of human rights, will lessen its commitment to the poor and the oppressed.

According to diplomatic observers, the church in Chile is a model of what the pope has said he wants in Latin America: concerned, organized, identified with the poor and a strong force for human rights, yet not so politically involved that it loses its moral and religious force.