BRITISH FORCES appear to be taking relentless control of the air over the Falklands and the seas around them. This sharpens the principal question facing Argentina's generals. By seizing the Falkland Islands, they committed a political blunder assuring that they would not receive assistance even from the few countries inclined to offer rhetorical support. They may have committed a military blunder as well. Argentina's forces are being cut up and isolated. How do the generals mean to get their country out of this fix?

They are caught between the military facts, which counsel a diplomatic settlement, and the political facts at home, which indicate that the honor of the military, or at least the tenure of the current leaders, may not survive a settlement. What a pity that the generals failed to contemplate that dilemma before April 2. It is a typical mistake of a dictatorship that has deprived itself of the democratic mechanisms of debate and inquiry.

No outsider can be sure how the generals will resolve their dilemma. Will the losses goad them to stay in battle and refuse accommodation? Or could these losses possibly be portrayed as the price a brave nation paid to defend its honor against overwhelming odds? There is an element of mystique in Argentina's politics and on this may depend the response to Britain's methodical Anglo-Saxon tightening of the screws.

Regrettably, Argentina rejected the mediation being offered by Peru's president, Fernando Belaunde Terry, over the weekend. That put the generals in the foolish position of turning away from a Latin initiative, one made by a statesman who in no way can be characterized as an American puppet. Fortunately, there are signs that some of the leaders in Buenos Aires remain interested in the Belaunde initiative. That would seem to offer Argentina what hope there is for minimizing the damage it did to itself by its heedless aggression.