President Mohammed Siad Barre, with his nation enmeshed in an escalating conflict with neighboring Ethiopia and struggling to care for the world's largest refugee population, today declared a state of emergency.

Siad Barre reconstituted the Supreme Revolutionary Council and took over all governmental powers, citing "the continuing invasion of the country by the Ethiopians and their allied forces" (the Soviet Union and Cuba) as the primary reason.

Although it was impossible to determine immediately what impact the move might have on the border war, an intensification of the fighting could cause difficulties for the Carter administration.

Washington recently signed a controversial agreement with the Texas-sized East African nation to provide $40 million worth of weapons in return for use of Somali military and port facilities by the American rapid deployment force.

Congressional critics of the agreement have warned that it could widen the Ethiopian-Somalia conflict into an East-West confrontation in the volatile Horn of Africa.

Ethiopia, with upwards of $2 billion worth of Soviet arms received in the last three years, has the military advantage. The United States would also be on the diplomatic defensive in such a situation since most African nations refuse to recognize Siad Barre's claim for self-determination for the ethnic Somali majority that is fighting in Ethiopia's Ogaden region.

Somalia maintains that it owns forces not involved in the fighting but rather those of the Western Somali Liberation Front and other guerrilla groups whose "just struggle" Mogadishu supports.

Serious doubts have been voiced about the Somali claim, however, and Congress has stipulated that the administration must provide "verified assurances" that no Somali regulars are in the Ogaden before any weapons deliveries begin.

Despite the state of emergency, the capital remained calm and no armed troops patrolled the streets or guarded government buildings.

Siad Barre made the announcement in a speech broadcast while an estimated 60,000 Somalis paraded through Mogadishu to commemorate the bloodless military coup that brought him to power Oct. 21, 1969.

People from all walks of life marched in uniforms and traditional costumes followed by the police and military, displaying tanks, armored personnel carriers, anti-aircraft guns, missiles and rockets.

After using a 25-member military council for the first seven years of his rule, Siad Barre has been slowly introducing democratic procedures since the establishment of the Somali Revolutionary Socialist Party in 1976. The council was disbanded, a new constitution was promulgated last year and a parliament was elected at the end of the year.

In the last year, however the war in the Ogaden has escalated and refugees, now numbering an estimated 850,000 have inundated the country. The refugees claim they were driven out by Ethiopian military attacks and land seizures. There have been reports here of cross-border incursions by Ethiopian troops.

Aside from the war and refugee situation, Siad Barre blamed the state of emergency on continuing "corruption, misuse of power, nepotism, tribalism, and inefficient bureaucracy."

There was some feeling that Siad Barre may use his new powers to move closer to the United States by crushing the remnants of procommunist elements from the early 1970s when Somalia was allied with the Soviet Union.