When a somewhat notorious former Army major with alleged links to El Salvador's death squads announced last fall that he was starting a political party, the American ambassador recalled recently, word around the U.S. Embassy was that "he's just a right-wing extremist. He can't get any support."

But no one is dismissing Roberto D'Aubuisson anymore.

With elections for a constituent assembly due March 28, there appears to be a growing possibility that the massive increases in economic and military aid planned by the Reagan administration will go to a government in which D'Aubuisson plays an important, perhaps decisive role.

For two years, the Carter and Reagan administrations, as well as the Christian Democrats they support in the current Salvadoran government, have presented D'Aubuisson as the prime example of everything wrong with this country's right wing.

The Christian Democrats' coalition with the military since the reformist officers' 1979 coup was portrayed as a moderate choice between the extremes offered by leftist revolutionaries on one side and people like D'Aubuisson on the other.

Meanwhile D'Aubuisson's U.S. visa was revoked and the major was deported from the United States as "undesirable." He has been accused of threatening American diplomats here, promoting coup attempts, working with if not directing death squads and playing a role in major political assassinations, including that in 1980 of San Salvador archbishop Oscar Romero.

D'Aubuisson denied all this and no formal charges were ever brought against him. He returned in September, and now he travels the nation taking his campaign of fierce anticommunism deep into areas often dominated by leftist guerrillas. As he does so he has proved himself the most charismatic politician on the national scene.

His Nationalist Republican Alliance is also one of the best organized political machines, the one party mounting a full-scale political assault on Christian Democrats--who suffer all the handicaps of incumbency in desperate times.

"Tremble, tremble communists! Because the people have awakened," the fight song blared out of loudspeakers at a D'Aubuisson rally in the town of Nueva Concepcion last Sunday. "They've understood, they've understood who is the enemy."

D'Aubuisson allows no question as to who the enemy is or whom he considers "communist." Socialism, communitarianism (the credo of the Christian Democrats here) and communism are the same, he says.

A few hundred straw-hatted peasants, lured from stalls of cheap plastic merchandise at a county fair listened as D'Aubuisson denounced the members of the current government. They are like watermelons, he said, "green"--the Christian Democratic color--"on the outside and red on the inside."

D'Aubuisson said his party would not reverse the reforms begun by the Christian Democrats, but would make sure that redistributed land was given to private owners and not developed into government cooperatives. D'Aubuisson's opponents question the sincerity of this promise, considering the major's strong support among former owners of the redistributed land.

Surrounded by his upper-class backers, D'Aubuisson, wearing worn, scrubbed blue jeans, thanked the armed forces for what they've done for the country, naming each branch of the service and giving special thanks to those "anonymous heroes" in the paramilitary rural patrols.

Although the Army is not allowed to vote, its rank and file makes up some of D'Aubuisson's strongest constituency and many armed men in civilian clothes, one wearing a baseball cap with the word "Captain" across it, were in attendance at Nueva Concepcion.

Since D'Aubuisson announced the formation of his party, he has attracted not just the arch-conservative rich and would-be rich supporters he had in the past, but a number of middle-class Salvadorans who see a strong leader--a caudillo--as the only solution to growing chaos and a possible guerrilla takeover.

"If this country doesn't go communist it will be a miracle," one member of D'Aubuisson's entourage told a reporter. "The guerrillas are almost in power and what does the State Department want? Human rights!"

D'Aubuisson and his key aides say that his image as a wild-eyed extremist is overstated, and certainly the slender, slightly built 38-year-old leader presents his case to the voters in reasonable tones if not reasonable words, only occasionally and intentionally adopting a sinister intensity to warn "those gentlemen who are blowing up our bridges" that "the people and the armed forces will defeat them and will pacify this country . . . because if there is one thing we Nationalist Republicans offer it is to pacify this country."

"El Salvador will be the tomb where the Reds will end," reverberates the chorus of the party anthem, playing on the idea now shared in the Reagan administration that this country is important to the fight against communist aggression. "We're saving America here."

But there is a great deal of concern in El Salvador among many moderates that a victory by D'Aubuisson's party will make a bad situation worse, and the people most committed to the electoral process, as the beginning of a solution to the bloody divisions, are in many cases those most concerned at the prospect of a D'Aubuisson victory.

One prominent Salvadoran working to help promote the elections said the people will have every opportunity to choose the party they want to draw up a new constitution. If they elect D'Aubuisson's party, "then that is their destiny," said the official. "If what people want is to live under a very strong, fascist government that is their choice. All I have to do is pack my bag and leave the country, because there's going to be a bloodbath here. It's just like if the FDR the front of political allies of the guerrillas who are boycotting the elections were to win. There's going to be a bloodbath."

There are no reliable polls in El Salvador, so it is impossible to predict the winner. But D'Aubuisson's party and the Christian Democrats are the only parties with the necessary candidates in all 14 provinces. They are also the only parties sufficiently organized to have placed their people on provincial election-supervision committees.

The National Conciliation Party, which ran military governments here from 1961 to 1979, has been largely discredited since its ouster in a coup in October 1979. The Democratic Action Party, a moderate conservative group favored by some businessmen, has shown no major strength, according to several political analysts.

Since all but one of the seven opposition parties in the elections are considerably to the right of the Christian Democrats, D'Aubuisson's party is expected to have a broad range of choices in forming coalitions within the constituent assembly even if it does not come close to winning an absolute majority.

The constituent assembly's 60 members will have the power not only to draw up a new constitution but also to oust the government and appoint an interim administration as soon as election results are certified.

The main hope of the Christian Democrats is that their efforts at bringing about major reforms in the last two years, especially the land reform backed by the United States, will win them the necessary votes.

But in the view of U.S. Ambassador Deane R. Hinton, "The Christian Democrats have all the liabilities of having been the party in power during a period of violence, sharp economic decline and rising unemployment.

"Is the voter going to give them credit for what they've done with the reforms, or does the guy say, 'Jesus, this country's a mess,' and vote for somebody else?"

Hinton would not speculate on the effect a D'Aubuisson victory might have on relations with the United States, and he credited D'Aubuisson with taking advantage of a political opportunity that the guerrillas passed up.

But Mario Redaelli, a Nationalist Republican Party secretary and longtime associate of D'Aubuisson, said he would expect a government led by their party to gain full international acceptance and obtain enough additional aid to end the guerrilla threat in six months regardless of what Redaelli described as D'Aubuisson's past undeserved reputation.

"We will be a legal government. That will give us more credibility worldwide," said Redaelli. "We believe the United States will support any government that is elected because that's what they want."