THE MILITARY NEWS in El Salvador is the guerrillas' capture and holding for two days of Berlin, population 35,000, a city in an interior province remote from their strongholds near the Honduran border. Most American observers have reacted cautiously, aware perhaps of the exaggerated response to the communists' Tet offensive in Vietnam. Still, Berlin was a serious embarrassment to the government. The guerrillas, relying on ambushes, sabotage and intimidation, do not seem to be near a country-wide military victory. Nor is there evidence that they have developed a mass following. But their pressure is constant and perhaps growing, and neither in San Salvador nor in Washington are the authorities certain what to do.

Some of the Salvadoran government's problems are familiar: Nicaragua continues to augment the guerrillas' locally obtained arms. The Reagan administration has not gotten from Congress all the military aid it has sought. Other problems arise directly within El Salvador.

The Salvadoran armed forces had a year, 1982, to use their new American aid and training to turn the corner, and did not. They have been slow to adopt the aggressive, small-unit patrols their American advisers feel are best suited to routing guerrillas. The Americans favor reform, but now say the armed forces have been "distracted" by politics (pushing land reform) and political infighting. Others note that Salvadoran commanders, uncertain of their troops, have preferred the safer tactic of large-unit sweeps, and that the government has been spread thin by having to defend economic targets.

Some officers have political associations on the feudal right. One of them, much admired by the Americans for his military record, Col. Sigfred Ochoa, last month challenged the reform-minded chief of staff in what Georgetown University's Robert Leiken aptly calls an episode pitting "the Americans' darling against their right-hand man."

There is a sense of a new turning point. The Americans nervously ask for "a more dynamic approach" by the Salvadorans and the transfer of American advisers from training to brigade-level operations. Mr. Leiken suggests that anti-communist military groups in El Salvador, Guatemala, Honduras and the Nicaraguan opposition may join and launch their own combined regional offensive.

No doubt there is room for military improvement. But steps that give greater sway to the military foes of domestic reform, and that threaten to bring outsiders more directly into the struggle, are self-defeating. A time of frustration is the right moment to renew a search for a political solution on the middle ground.