President Mohammed Zia ul-Haq has taken the first hesitant steps toward replacing his 4 1/2-year-old martial law government with what he sees as a new form of Islamic democracy that will reshape Pakistan's traditional political parties and displace most of its leaders.

The vehicle for this possible end to military rule is the newly appointed Federal Advisory Council, which held its first meetings here this week.

All of the council's 288 members were picked by Zia and can be fired by him and its powers are merely advisory. Even so, many diplomatic observers and Pakistanis opposed to the present military government say the council is more representative and of a higher quality than they had expected, especially in view of a virtual boycott of the council by the top leadership of Pakistan's outlawed political parties.

That so many middle-echelon politicians decided to defy their leaders and cast their lot with Zia is reported to have caused great concern among the top party figures, who are now left out of what little political activity there is here.

The council's membership includes more than 100 persons who belonged to this country's most popular political groups--the Pakistan People's Party of executed former prime minister Zulfiqar Ali Bhutto, which Zia sees as the main threat to his government, and the Moslem League.

Many of the members formerly belonged to elected provincial assemblies. One council member, Z. A. Suleri, the editor of the Pakistan Times, who has said he possesses no political ambition, recently wrote that an overwhelming majority of the council would be elected to a parliament from their district if an election were held. Besides the political figures, most of the country's leading business and land-owning families are represented in the council, usually by a younger son.

While politicians who chose the council against their party's decision had little influence in the sharply hierarchical structure of the party organization, many observers here see the council as sounding the death knell of Pakistan's political parties.

"He has broken the backs of the parties," said one Pakistani political observer.

"The people realized there is no possibility for an election soon, and if they want to get into it politics , the majlis council is their only opportunity," explained another.

Breaking the party structure and rendering its top leadership impotent appears to have been a major aim of Zia, who feels the politicians consistently have tried to thwart his attempts to build a new Islamic form of democracy for Pakistan instead of continuing the Westminster model inherited from Great Britain.

"I have no complaint against the politicians," Zia said in his opening address to the assembly last Monday. But he added that they want a form of government based on their experience "and I want to adopt a different method according to my perception."

Typically, Zia is vague on the details of this new democratic model, but he stated clearly that the council is "an intermediary stage between the martial law government and the future Islamic democratic government."

Despite its limitations and the uncertainty about where it might lead, the formation of the council and the suprising individual strength of its membership were seen as good signs by many Pakistanis who are tired of 4 1/2 years of military rule. The United States, which has embarked on a new five-year, $3.2 billion military security and economic aid relationship with Pakistan, takes a similarly hopeful view.

"We hope the council will create an environment as soon as possible for the transfer of power and the end of martial law," said one Pakistani. He added that while some believe Zia really wants to transfer power, others think the formation of the advisory body is merely cosmetic to give his government the semblance of having a popular base.

Visiting U.S. Rep. Joseph P. Addabbo (D-N.Y.) said he told Zia that the formation of the council and the accompanying lifting of press censorship will improve Pakistan's relations with Washington.

U.S. government officials, however, were quick to deny that U.S. pressure had anything to do with Zia's decision to form the council.

The idea of an appointed council came after Zia had twice cancelled promised elections, the last time in October, 1979, when he tightened martial law and imposed press censorship.

Since the Soviet invasion of Afghanistan two years ago, Zia has said it will be impossible to hold elections because of the possible subversion of candidates by nations trying to influence Pakistani government policy. Although he has never said so publicly, it is believed he was referring to the Soviet Union and India.

The council, then, is his attempt to give his military government a broader base without what he sees as the danger of elections.

While Zia told the council in his opening speech to it that it has no policy-making role and is merely an advisory body, there is some speculation here among diplomats and Pakistanis alike that the members might chafe at those restrictions and push for greater power.

"Has he created something he cannot control?" asked one diplomat.

"You cannot assemble such high-powered people and expect them to be a rubber stamp. I think it is bound to acquire a momentum of its own," he continued.

But Zia, who appointed the members, also retains the power to throw any one of them out of the council if he gets out of hand.

More important, perhaps, Zia has made it clear he wants to consider the council's recommendations and, if his past performance is any guide, he will be unlikely to mount a direct challenge to it. One Pakistani journalist said that would cause a problem for Zia since council activities will be reported in the press and the people are more likely to side with their representatives, even if they are appointed, than with a martial-law president.

"He will have to think one thousand and one times before saying no," said a Pakistani.