The Carter administration, concerned about growing Soviet ties with Argentina, has decided to seek an improvement in U.S.-Argentine relations that some U.S. officials hope will result in a resumption of American military aid to that country.

The administration is barred by law from giving military assistance to Argentina on the grounds that the regime of President Jorge Rafael Videla has massively violated human rights.

However, U.S. officials are known to be hopeful that the policy shift being set in motion will improve the climate sufficiently so that, by next year, the administration will be in a position to tell Congress that U.S. interests would be best served by relaxing the prohibition on military aid.

The administration's decision resulted from a recently completed interdepartmental review ordered by the White House of all aspects of U.S. policy toward Argentina.

According to sources familiar with what went on, that review process touched off intense controversy between officials who see the policy shift as a retreat from the administration's international advocate of human rights and those whose primary concern is to deter what they see as a Soviet bid for a greater influence with the third largest country of Latin America.

Prompting the reassessment was concern here over Argentina's decision earlier this year to make large-scale grain sales to the Soviets as the United States was trying to mount a partial international grain embargo against Moscow in retaliation for the invasion of Afghanistan.

The grain sales opened up a situation that since has seen the Videla government, despite its strongly anti-communist, right-wing domestic policies, actively encourage greater trade and other links with Moscow. That, in turn, has caused concern here about an expanded Soviet-Argentine relationship that might ultimately see Argentia turning to Moscow as a supplier of military equipment.

In the review, the sources said, several influential forces -- the Defense Department, the National Security Council staff and the State Department's Bureau of Inter-American Affairs -- explicitly cited the Soviet connection as demonstrating the need for the United States to improve its strained relations with Argentina and get into a position where it can exercise more influence with the Videla government.

According to the sources, the argument was vehemently opposed by Patt Derian, the assistant secretary of state for human rights. In the past, Derian has been especially outspoken in her criticism of the Videla regime's human rights record and, on at least one occasion, is understood to have threatened to resign if Washington softened its stance toward Argentina.

However, Derian is expected to leave the State Department shortly, and, the sources said, the review group's recommendations, influenced partially by the contention of some U.S. officials that the human rights situation in Argentina is improving, was that in the United States should try to open what administration officials are calling "a wide-ranging new dialogue" with Argentina.

To support the argument that the human rights climate within Argentina is improving, administration officials note that the incidence of so-called "disappearances" -- cases of government opponents who vanish and are presumed to have been killed -- has dwindled from around 400 in 1978 to 44 in 1979.

However, a very different view is contained in the report recently released by the Organization of American States Inter-American Commission of Human Rights. It charges that, despite the drop in disappearances, Argentina's military government is guilty of massive rights violations, including murder and torture, and concludes that "the thousands of disappeared detainees . . . can with reason be presumed dead."

The State Department's annual human rights report on Argentina, issued in February, while noting that the number of disappearances has "declined significantly," said that phenomenon seemed more the result of the government's success in wiping out leftist opposition than any softening of its repressive policies. The report also found that torture, summary imprisonment and other repressive tactics are still being used in Argentina.

Still, the sources said, the dominant mood in administration policy making circles is that the time is ripe to attempt a new dialogue with Argentina. They added that Washington has been encouraged in that view by the signals given by the Videla government to three high-ranking U.S. official visitors in recent weeks: Gen. Andrew J. Goodpaster, former NATO commander, Gerard C. Smith, former director of the Arms Control and Disarmament Agency, and Undersecretary of Commerce Luther C. Hodges Jr.

The sources noted that the policy review's recommendation was that the planned dialogue should focus on what one called "the totality of U.S.-Argentine interests" and added it would be a mistake to assume that the sole purpose is to restore U.S. military aid to Argentina. However, the sources also conceded, the Videla government has made clear that any increased Argentine cooperation with U.S. global policies ultimately will depend on a resumption of military assistance.

Argentina, long a major military client of the United States, rejected U.S. assistance in early 1977, shortly after a military coup brought Videla to power, on the grounds that Washington's pressures over human rights were an interference in its internal affairs.

The Argentines later tried discreetly to reverse field, but in late 1978, pending sales of roughly $100 million in U.S. military equipment had to be canceled after Congress adopted an amendment, sponsored by Sen. Edward M. Kennedy (D-Mass.), barring any military aid to Argentina.