Gen. Augusto Pinochet, his white-gloved hand outstretched to the cheering crowd, today inaugurated the "constitutional-transition" phase of his long presidency by striding publicly for the first time into the government palace that was bombed during his violent 1973 coup.

A lone trumpet fanfare announced the general's arrival at La Moneda, the great neoclassical building where Pinochet's predecessor, Salvador Allende, died during the coup that brought Pinochet to power. Stepping from the open car that had borne him through downtown Santiago in a swirling ticker-tape parade, Pinochet saluted the stiff ranks of uniformed soldiers at La Moneda's entrance. Then, flanked by photographers and plainclothed security guards, he officially moved in.

Pinochet carries with him approval of the Reagan administration, which has just lifted its restrictions on Export-Import Bank financing and reinvited Chile to participate in joint naval exercises -- sanctions imposed after Chile's refusal to extradite intelligence officers indicated for the 1976 murder in Washington of exile leader Orlando Letelier.

Acting Assistant Secretary of State John A. Bushnell, in congressional testimony Tuesday, defended the shift from the Carter administration's selective strictures as against U.S. economic and strategic interests. "This was one place where we were shooting ourselves in the feet and should stop it," he said.

The move into La Moneda marked the beginning of Pinochet's rule under a constitution. But opposition leaders have attacked it since before it was approved by a plebiscite last year, charging that it gives unprecedented power to the president and armed forces who have ruled by fiat since taking power.

"The government ceases to be mere representatives mandated by the people [as in Chile's democratic past] and turns itself into an autonomous power capable of governing even against the popular will, which is the negation of all democracy," wrote a group of opposition lawyers and scholars who opposed the proposal.

Although opponents were allowed some access to the public prior to the vote, most foreign commentators -- including the U.S. State Department -- challenged its fairness. The constitution written under Pinochet's direction may maintain him in the presidency for the rest of his life. He is 65 now, and could be chosen president again in 1989, which would ensure him of power nearly until the 21st century.

"Chi-le-ans," Pinochet intoned from the flag-draped window of the newly remodeled place, his amplified voice echoing across the half-empty plaza below him, "my dear compatriots, working men, women who work to keep the hearth, students in their studies. I know your problems. I know your anguish.From this balcony I embrace you all."

Thus, with his arms upraised and his wife by his side, Pinochet began the second half of what his government expects will be at least 16 years of strong authoritarian rule. Under the terms of a plebscite approved by Chilean voters last Sept. 11, the seventh anniversary of the overflow of Allende, the country today enters a "transitional period" under a new constitution that allows for no presidential election until 1989.

"The 11th of September 1973 is a symbol of historic reconstruction," Pinochet told the crowd. "The 11th of September 1980 is a symbol of confidence in Chile's future."

Workmen and architects had spent the last six months in a frantic restoration of La Moneda, working through the night to paint, repaint trees, haul in fine Indian marble, and cart the nation's finest furniture and museum pieces to the place that will house the Pinochet presidency.

"But nature will win the race over the institutional," wrote Hoy magazine, Chile's only real opposition press, on learning about the replanting of orange trees at La Moneda. "There will be oranges in 1986. Full democracy we are told -- only in 1989."

The day apparently passed with no major protests or violence, despite a recent increase in dissension and reports of renewed repression. The entire downtown area was blocked to traffic, and in the chilly hours before sunrise, the national police walked in small groups up and down the Santiago streets.

Pinochet, a red-white-and-blue sash across his broad chest, spent much of his long formal address to the nation attacking the Allende presidency and enumerating the accomplishments of his own.

"The lamentable trilogy of demagoguery, statism, and Marxism reached is worst extreme in our fatherland with this last government of the republic," he declared to an applauding audience in the modern, high-security government building the Pinochet regime has used since aircraft attacked La Moneda.

"Many today have forgotten how during the Marxist government, the most characteristic values of our nationality were threatened or sneered at," Pinochet said. "The free spirit was threatened by imminent totalitarianism. Strong, just, and impersonal authority had disappeared, giving way to anarchy. The judicial spirit was destroyed by a government that despised legality. The sentences of our courts were ignored in a systematic way. All economic private initiative was suffocated by socialist collectivism."

That, Pinochet declared, was why his government was forced to take power. "It was necessary to gather all the reserves of our patriotism, to impede this fall into the abyss with the intervention of the armed forces. More than seven years have passed, with some painful days, and Chile is now an internationally open country with the great spirit created by her better times."

His address was met with a sustained standing ovation and vigorous shouts of "Viva, Chile!" Pinochet's motorcade carried him quickly to an ecumenical service at the marble-arched Santiago Cathedral. There was considerable argument about the service within the Chilean Roman Catholic Church, which has been one of the most vocal and ardent opponents of human-rights abuses under the Pinochet regime. On Monday, a group of priests in a Santiago church held a vigil to protest the use of the cathedral for the service.

"It's an institutionalized dictatorship, and that's the worst part," said a professional who works for human rights in Chile. "Before, their main means of repression were of a transitory nature. But the worse part now is that this constitution is permanent."

But the service went on as scheduled, the high voices of the choir rising inside the cathedral as Pinochet sat facing the alter with his fingers intertwined on the gold hilt of his sword.