The Senate, frustrated with the administration's faltering negotiations in the Falkland Islands crisis, declared last night that the United States "cannot stand neutral" and should work "to achieve full withdrawal of Argentine forces" from the South Atlantic islands.

The resolution, which passed 79 to 1 with Sen. Jesse Helms (R-N.C.) casting the lone vote against it, was considerably diluted from the version introduced on Wednesday by Sen. Joseph R. Biden Jr. (D-Del.).

However, Biden said that the compromise, drafted to avoid a filibuster by Helms, "makes absolutely clear to the whole world we stand four-square with Great Britain."

Sen. Daniel Patrick Moynihan (D-N.Y.) quoted Dante--"The hottest circles of hell are reserved for those who in times of crisis preserve their neutrality"--and added that "we have avoided that. We stand behind Great Britain."

The resolution stopped far short of urging economic sanctions against Argentina for its April 2 invasion of the Falklands or of endorsing U.S. logistical support for the British fleet.

And Sen. John W. Warner (R-Va.), who had teamed with Helms to block the amendment as originally worded, said: "This is not the time to take a position which would tilt in any way . . . . The U.S. is the only party which could negotiate a successful termination of this dispute . . . . I have not given up hope that a peaceful solution may yet come."

Likewise, Helms said: "I hope no nation in Central or South America will interpret this as being a slap in the face. What we face is a severe strain in the Western Hemisphere system as a result of the dispatch of the British fleet . . . . "

Throughout the day, during furious negotiations over the resolution among various senators, the administration took no position on the issue, treating it as an internal Senate matter.

Majority Whip Ted Stevens (R-Alaska), acting as Senate leader in the absence of Sen. Howard H. Baker Jr. (R-Tenn.), was careful to point out that "this is not a resolution under the War Powers Act. It does not authorize the president to use military force to assist our allies."

To reinforce that point, language in the original resolution that urged the administration to "use all appropriate means to assist the British government" was deleted. Also deleted was a phrase saying that the United States should uphold "the principle of self-determination" in the Falklands dispute. Argentina does not want self-determination in the Falklands, whose inhabitants have been under British rule for 149 years.

However, the resolution supports U.N. Security Council Resolution 502, which calls for Argentine withdrawal from the islands, and recognizes the "right of the United Kingdom and all other nations' right of self-defense under the United Nations Charter."

Biden's resolution, attached to a nuclear waste bill, was cosponsored by a majority of the Foreign Relations Committee and its chairman, Charles H. Percy (R-Ill.).

However, some senators would have gone even further to shore up the U.S.-British alliance. "Our support should take the form of economic sanctions, shared intelligence, logistic supports and consideration of any requests for assistance or support the British might submit to us," said Sen. John G. Tower (R-Tex.).

He said "the perception of the United States as a dependable ally" and "the credibility of our leadership in NATO and the solidarity of the alliance itself" were at stake.

On Tuesday the House is expected to take up a similar resolution calling on the United States to provide "full diplomatic support" to the British if negotiations fail.