Four months after taking power in a military coup that raised hopes of democratic reforms, Guatemalan President Efrain Rios Montt has ended a brief period of political and press freedoms and tightened his hold on power with a combination of state-of-siege restrictions and a paternalistic style of government.

The new ruler's appeals for honesty in government and business and compassion for the country's masses of poor, mostly Indian peasants have been a well-received contrast to the charges of corruption and unrestrained death squad activity made against the previous government of Gen. Romeo Lucas Garcia, according to Guatemalan politicians and businessmen and foreign residents.

But the new government's path appears to these observers to have traveled away from the goal of human rights guarantees and democratic reforms sought by U.S. officials who would like to resume military aid to combat a smoldering guerrilla war.

Military assistance has been suspended since 1977 because of charges of human rights abuses by previous governments.

Under Rios Montt, Guatemala continues to be a country deeply polarized between city and countryside and between non-Indian, Spanish-speaking ladino and Indian. Two weeks ago, Rios Montt imposed a state of siege with restrictions on personal and political liberties that are as harsh as in any Latin American dictatorship. The political relaxation--and the new crackdown--were felt mainly in the urban centers.

In the remote northwestern areas of Quiche and Huehuetenango provinces, where the population is mostly Indian and the fighting is heaviest, conversations with residents indicated that Army attacks against villages, which they say include killing of women, children and unarmed men on suspicion of being guerrilla supporters, are recurrent and have continued unchanged since Rios Montt took power.

The killings were reported by foreigners and church workers living in the area, and two of these sources estimated the total number at several thousand since March.

The reports said there had also been an increase in killings by the leftist guerrillas, often in retaliation against persons who allegedly cooperated with the government.

In an interview this week, Rios Montt defended the state of siege as necessary to restore government "credibility" by allowing security forces to act "in a legal framework" against subversives.

The decree removed civil rights guarantees announced when Rios Montt took power and allows security forces to arrest anyone on suspicion of "subversion." All political activity has been banned, and the press is forbidden to print anything about political parties, the guerrillas--the word itself is taboo--and military action by the Army except official government communiques.

Permits are required for all meetings except family gatherings.

The decree provides for special courts, made up of military officers, to administer quick sentences, which include public firing squads, to suspected guerrillas captured in the "conflict zones."

"If we find guerrillas fighting against us, and if they are killed, they're dead," the president said. "And if we capture them and they don't repent, we shoot them. But it is a matter of legal, ethical and moral procedures. It is not caprice."

Rios Montt made a fervent denial that women and children "or even men" had died in Army massacres since he took office.

"I am telling you the truth . . . . We are not burning villages, we are not raping women, we aren't burning houses. We are trying to bring security, not violence," he said.

Since the coup, the government has charged that all killings of civilians and village burnings were the work of guerrillas.

The state of siege decree was described by politicians and diplomats here as a declaration of war against the insurgents, who until recent months roamed relatively unchallenged in towns and mountainous farm lands in northern Quiche, Huehuetenango and other areas. The decree followed a month-long government offer of amnesty in which the government says 2,000 guerrillas or guerrilla sympathizers turned themselves in.

The Army began in January to set up forward bases in an attempt to regain control over the disputed areas. Since the coup, Rios Montt has coupled the military offensive with populist speeches about fighting with "guns and beans"--a Guatemalan version of "hearts and minds" strategy to win peasant sympathies with economic reforms.

In the interview, Rios Montt said his program would provide "security" to Indians by setting up local civil defense patrols in villages and provide economic help by putting Indians to work "with picks, shovels and wheelbarrows" on road-building projects.

Rios Montt portrayed most of the conflict as between ladinos and Indians, who make up more than half the population but have remained outside the country's political and economic mainstream. In recent years growing numbers of Indians have become active in peasant unions and other activist groups, and many have joined the guerrillas.

"What we want to do is reconcile ourselves with the Indians," he said. "We have to create a national unity within our diversity. We have to make them feel secure in being Indians" to prevent the current flow of peasants from the disputed areas into the crowded cities.

Two moderate politicians and a Western diplomat interviewed here said the state of siege crackdown was a political as well as a military measure and was intended to complete the consolidation of Rios Montt's power, which one of the sources described as now "virtually absolute."

A retired Army general, Rios Montt ran for president with the support of the Christian Democratic Party and some moderate leftist groups in 1974. He was defeated in what was widely believed to have been a government-arranged vote fraud. After political parties again charged that elections this January were fixed in favor of the government candidate, a group of young military officers overthrew the government March 23.

The officers drafted Rios Montt, who is believed not to have participated in the coup planning, to lead a ruling junta.

Rios Montt's early speeches, spiced with folksy references and maxims of his fundamentalist Protestant beliefs, gave rise to speculation that he would not be taken seriously as a leader, and last month rumors of an impending coup were rampant here.

Instead, on June 9, Rios Montt orchestrated a palace coup of his own, declaring himself president and forcing the two other generals with whom he shared power to step down.