President Mohammed Zia ul-Haq has converted the hijacking of a Pakistani airliner into a wide campaign against opponents of his martial-law rule that most observers here believe he is winning.

Political activity had resumed here since creation, despite a government ban, of the Movement for the Restoration of Democracy, which demanded immediate elections and an end to Army rule. That activity has now been halted, however, with Zia jailing at least 500 civilian politicians and reports of more arrests circulate daily.

The arrests have been so successful in picking off key figures in the opposition movement that the underground communications network among civilian politicians has been crushed to the point that the only way members can get news of its activities is through broadcasts of foreign agencies such as the British Broadcasting Corp. and the Voice of America, according to Pakistani and diplomatic sources here.

"Bhuttoism" has become the new dirty word of the Zia administration as the president focuses attention on the role in the hijacking of Murtaza Bhutto, 27, son of executed former president Zulfiqar Ali Bhutto, to discredit the Bhutto family's Pakistan People's Party.

Zia almost spit out the work "Bhuttoism" in anger during a televised speech Wednesday, the day more than 100 Pakistani hostages returned home after being held on a hijacked Pakistan International Airlines plane for almost two weeks.

He accused the leadership of the People's Party -- Bhutto's widow, Nusrat, and daughter, Benazir, both jailed in the present crackdown -- of following "politics of terrorism and gangsterism" in trying to regain power. Zia accused them of having a hand in the hijacking.

The government-controlled press has steadily attached Bhutto, who was executed by Zia in April 1979 after being convicted of political murder, but who has emerged in death as a major rallying force against the current government.

"The meaning of Bhuttoism has finally come clear," the Pakistan Times said Friday. "It is the almost naked pursuit of power with the sole objective of inflicting revenge on a country whose political institutions had already been destroyed [by Bhutto] before the advent of martial law in 1977."

Zia's tactic appears to have worked -- at least for the time being. Not only has he succeeded in tarring the entire Bhutto family and its party with the brush of terrorism, despite what many observers here see as a wide difference between Murtaza Bhutto and his mother and sister, but the move to force elections also appears to have lost momentum.

"Zia has gained a little edge," acknowledged a Pakistani who opposes the martial-law government. "He has gained support from what you might call the silent majority of those who are really not political activists and even from some who are not in favor of Army rule but who are now buying Zia's line" that elections now would endanger Pakistan's security.

Nonetheless, most observers here emphasize that it is only a short-term victory for Zia. "But that's all a martial-law government looks for," said one close diplomatic analyst of Pakistani politics, which has a history during this country's almost 34 years of independence of attempts at democracy interspersed with Army rule.

"The truth of the matter is that Pakistan is born of politics and its highly politicized public cannot live without the staple of political fare," wrote Z. A. Suleri, chief editor of the Pakistan Times. "The people have invariably gotten restive under an even otherwise good military regime. The political itch is compulsive."

Even Army officers who are part of Zia's government acknowledge that the military cannot rule forever, but they echo his view that the time is not yet ripe for a return to democracy.

Instead, Zia has tried to broaden his government by adding two civilian politicians to the Cabinet and planning creation of appointed federal and provincial councils that would have still-undefined legislative powers.

Most observers doubt that these moves will work. The two appointed to the Cabinet are considered lightweights and the Army is so deeply entrenched in running the government that it is considered unlikely that appointed councils would have any power.

In surprising editorials in his newspaper, which is partially government-owned and generally follows Zia's lead, Suleri has argued that the military should allow civilian political activities so politics can come into the open.

"The embargo on political activity drives the seditious elements underground to a refuge where they flourish" because Zia has no opposition from "patriotic political quarters," Suleri wrote.

Zia's response to the almost two months of illegal political activity -- which has come with strikes by teachers, doctors and lawyers and student unrest that forced him to close universities -- has been measured.

He has jailed hundreds of politicians, breaking the backs of the nine political parties that make up the Movement for the Restoration of democracy, but he has not used massive force to curb demonstrations, thus avoiding creating martyrs.

While this is a martial-law government with press censorship and a ban on political activities, it is hardly a repressive military dictatorship. People feel free to speak against Zia and his government and newspapers manage subtly to insert anti-Zia information into their columns.

But mostly these days they have been carrying anti-Bhutto stories, reawakening memories of the late president's authoritarian rule, which also included press censorship, political jailings and repression.

Furthermore, they are accusing Murtaza Bhutto, the extremist son of the political family, with planning the hijacking from Kabul headquarters. Murtaza was seen by Western diplomats at the airport in Kabul, the hijacked jetliner's first stop, talking with the three hijackers.

One high government official said there is "substantial evidence" that members of Bhutto's faction, called Al Zulfiqar after his father and trained in Afghanistan, blew up a police station in Peshawar last year.

While this would support Zia's contention that Pakistan is beset with foreign conspiracies aided by political elements inside the country, diplomatic observers see another side.

The fact that a terrorist group could operate so freely in Pakistan, they say, points up the fragility of Zia's martial-law government.