The possibility of the United States lifting restrictions on the sale of military equipment to Argentina, which is under study at the State Department, has met with strong objections from the British government, according to U.S. officials and foreign diplomats.
The Reagan administration would like to patch up relations with Argentina, but is still wary of British sensitivities. Relations between the United States and Argentina were badly strained after the United States supported Britain in the Falklands Islands war.
The British say that resumption of military sales could be misinterpreted by Argentine military planners as a sign of American support. This, they say, could contribute to the Buenos Aires government making another miscalculation of the kind that lead to the Argentine invasion of the Falklands last year.
American military sales to Argentina have been blocked for the past five years by a combination of actions, including a 1978 congressional ban because of human rights violations in the South American nation plus another embargo last year because of the Falklands invasion.
If President Reagan eventually decides to lift the restrictions, officials here say the move will involve only small amounts of equipment, spare parts and training funds. It will be largely a symbolic gesture, they say, meant primarily to improve relations.
In addition, officials here see the move as encouraging what they say has been a change for the better in the political and human rights environment in Argentina in recent months. This includes the announcement last month that Argentina will hold general elections in October, the first in 10 years.
But it would also be designed to renew U.S. military contacts with Argentina, officials add, and reflect Washington's effort to resume a larger role as an arms supplier in Latin America, where western European firms and governments are increasingly filling that role in some countries and the Soviet Union in others.
In order for the existing restrictions to be lifted, Reagan would first have to certify to Congress that the Argentine government has made significant progress in human rights--another aspect that London has opposed--and that such military sales would be in the American national interest.
The United States was never a large supplier of military equipment to Argentina, selling mostly transport planes and spare parts. But in 1978 Congress banned such sales, although it allowed shipment of material under contract.
In 1981, however, Congress paved the way toward a restoration of military relations by dropping a requirement that Argentina had to give a full accounting of thousands of people who have "disappeared" in that country.
During the Falklands war in early 1982, the administration placed a new embargo on goods that were still being shipped under the pre-1978 contracts, which amounted to about $5.9 million worth of equipment.
British sources say Reagan administration officials have discussed the prospect of renewed military sales to Argentina with them on several occasions and that their government has objected strongly.
"Any such move would be very unwelcome," one diplomat said, although obviously the concern would be greater if any big weapons syetms were sold, he added.
He said this should not be interpreted as meaning that London thought smaller-scale sales were acceptable.