The street names here have read like the index entries in a history of the Spanish Civil War. Boulevards and plazas commemorate the battles that Generalissimo Francisco Franco won, the date they took place and the field commanders. A decision this week by the Socialist-controlled Madrid city council to restore a number of streets to their pre-civil war names has outraged the extreme right and sparked fascist-style demonstrations.

Downtown Madrid came to a standstill last night as thousands of uniformed youths and infuriated elderly veterans marched along what was the Generalissimo Avenue and is now renamed la Castellana (the Castillian woman).Behind the oddity of a demonstration over a street name lay the concern among onlookers about just how far Franco revivalism is going.

Last weekend the traditional call at the Francoist war veterans' annual rally to "save-Spain" received more than just a passing reference in the liberal press, which is increasingly concerned about the impact of the far right on the national governments's democratic program.

"Never has Spain been more offended by the world, never has she been more humiliated," said the leaders of the war veterans, Jose Antonio Giron, in his closing address to several hundred delegates assembled last Sunday in a Mediterranean resort hotel.

Giron, one of the founders of the Falangist Party in the 1930s and for many years Franco's minister of labor, accused the democracy of responsibility for terrorism, inflation, unemployment and most other problems facing Spain.He called for a "broad front" of right-wing parties as an alternative to the present parliamentary groups.

Giron carefully said that such a front would act within "constitutional limits." He ruled out "actions of a military nature." Yet the mood of the veterans was illustrated when the meeting wildly applauded the news that the supreme military court had refused to bow to official pressure and increase prison sentences passed on two right-wing officers convicted of a bizarre coup attempt nearly three years ago.

The two officers, a lieutenant colonel in the paramilitary Civil Guard rural constabulary and an Army captain on loan to the national police force, were accused of plotting to hold the government hostage in an attempt to reverse the transition to democracy. They were convicted by a court-martial of sedition and sentenced to terms of seven and six months jail.

The terms scandalized liberal opinion and the government-appointed captain general of the Madrid military region appealed for higher sentences. In the supreme military court last week, the original sentences were upheld in what an administration official termed privately "a slap in the face to the government and the whole democratic process."

The ruling was taken by political commentators as an indicator of the sort of pressure that the centrist government faces from still entrenched a francoists, who have little knowledge of and less sympathy with the workings of a parliamentary democracy. The leading independent newspaper El Paris editorialized that the court ruling was "the best example for any national or foreign observer that will allow him to understand what is happening here."

The government and press have treated the attitudes of the post-Franco military with extreme delicacy, recognizing the dangers of antagonizing the officers when the extreme right is making a stand against democracy.

This week, officials leaked the story that opposition in the barracks had forestalled a planned amnesty for a group of democratic officers who were expelled from the Army shortly after Franco's death on charges of sedition. In effect, they had supported a sort of constitutional order that eventually replaced Francoism. Officials said the government was considering withdrawing its support for an all-party congressional motion that would reinstate the cashiered officers.

One of the expelled officers, former major Luis Otero, told foreign correspondents earlier this week that a coup was a remote possibility in the present circumstances, but he said colonels could in the future act against an incompetent left-wing government.

The rally to protest the change in the Madrid street names echoed occasional slogns of "Army to power" -- a traditional call at right-wing gatherings -- which few at present take seriously. But the turnout of about 20,000 was impressive at a time of summer vacations.

While Madrid no longer has streets commemorating Jose Antonio Primo de Rivera, the founder of the Falangist Party, nor the battle of Brunete, where the international brigades were decimated when their counteroffensive was pushed back in 1937, there remains a residual concern about how far the population in general and of the Army in particular are in sympathy with the democratic government that ordered the street signs changed.