IN 1932 DESPERATE peasants in El Salvador rebelled against their feudal rulers, and upwards of 20,000 people, an unbelievable number, were killed. In 1979 the masses and the elite of Central America's poorest and most torn country are still at odds in essentially the same ways. The only thing new is that the latest cycle of violence, involving police murders of several large groups of demonstrators, the assassination of yet another government minister and the taking of hostages in several foreign embassies, has reached the international press.

The feeling that El Salvador represents only the serial unfolding of a Marxist cliche can easily lead to the conclusion that the Salvadorean people would be better off if revolution overtook the land. That would create other problems for the people, and send tremors through security-minded elements in the United States. But the present government, a military-based regime that came to power through massive electoral fraud, is as devoid of legitimacy as of competence. What new order would not be an improvement?

The State Department had denounced the manifest human-rights abuses of the Salvadorean government and of similar military regimes elsewhere in Central America. Thus has it earned the resentment of those governments - for ostensibly fanning rebellion - and the resentment of opposition elements - for not following through with a more systematic anti-government policy. The halfway nature of the American approach flows from two familiar considerations: a reluctance to throw gas on a fire that could blaze up out of control and produce "another Cuba," and an inclination to try to locate and strengthen moderates to steer change by nonviolent means.

The Senate Foreign Relations Committee, either despairing of this policy or not understanding it, recently eliminated the modest amounts of direct foreign aid to El Salvador, Guatemala and Nicaragua, the key country. The committee's vote was probably a mistake. The gesture of repudiation may win some points, but it contributes to a sense that the United States is washing its hands of Central America and this is likely to diminish any tendency by the regimes to conciliate their foes.

Aid as an economic tool may be hard to apply well at the moment in those three convulsed countries. Aid as a political tool can perhaps be used to reduce the convulsions and expedite reforms. It is not much of a hope, and not much of a policy, but it is more responsible than despair and withdrawal, which feed the flames.