Archbishop James A. Hickey of Washington, speaking for the U.S. Catholic Conference, yesterday took sharp issue with Reagan administration policy in El Salvador and particularly "the innuendo suggesting that church policy in Central America serves Marxist interests."

Testifying before Congress at a time when the administration is seeking an additional $60 million in military aid for El Salvador and considering increasing the number of U.S. military advisers there, Hickey said that U.S. policy should focus instead on "dialogue, cease-fire and negotiations."

He changed the prepared text of his opening statement to emphasize the views of the conference, the public policy agency of U.S. Catholic bishops, on the question of Roman Catholicism and Marxism. Though he mentioned no names, his remarks were aimed at statements last week by Secretary of State George P. Shultz and Vice President Bush.

Shultz, appearing before a Senate subcommittee, criticized "churchmen who want to see Soviet influence in El Salvador improved." A day later, Bush, in a private meeting with Latin American experts, said he was unable to understand how priests can work with Marxist revolutionaries in places like El Salvador.

Hickey, citing the "outpouring of faith and human emotion" that has greeted Pope John Paul II's visit to Central America, said the church stands for "social justice" everywhere, whether in countries like Poland that are dominated by communism or in nations controlled by "regimes of the right."

"We speak both as bishops of a church with significant human and religious interests in Central America, and we speak as American citizens who want our image and impact in Central America to be understood in terms of compassion, justice, peace and freedom," he said. "We do not believe our present policy conveys this message."

Hickey's remarks, while essentially a restatement of positions adopted by the bishops' conference two years ago, came at potentially a very sensitive time for the administration, which has become increasingly concerned about the failure of the Salvadoran government to defeat its guerrilla foes.

President Reagan's call for more military aid and his consideration of increasing the number of advisers and possibly changing their role have provoked a heated new debate on Capitol Hill about the wisdom of U.S. policy.

The president will meet with congressional leaders at the White House this morning for further consultations about the $60 million, and aides said he is likely to reach decisions by the end of the week on further steps.

In addition to Hickey's testimony, it is known that Archbishop John R. Roach of Minneapolis and St. Paul, president of the bishops' conference, has sent a letter to Reagan asking for a meeting to discuss the tensions generated by the church's position and the retorts to it by Shultz and Bush. Conference officials refused yesterday to discuss details until after the president receives the letter.

Hickey, disputing the contention that negotiations must inevitably lead to power sharing for the guerrillas, which is what the administration fears, told a joint meeting of two House subcommittees: "We come before the Congress to recommend a course of action: promote dialogue, insist on a cease-fire and support a negotiated end to the conflict." Among his main points:

The bishops "have always opposed interpretations of the Salvadoran and Central American conflict which place primary emphasis on the superpower or East-West rivalry. Unfortunately this geopolitical conception of the conflict has reappeared with new emphasis in recent days." The administration emphasizes this especially.

While acknowledging "with regret . . . that some military component may be required" in U.S. efforts, "we the bishops have never believed that a military solution was in the interest of either El Salvador or the United States . . . . The United States should talk more about ending the violence and less about prosecuting the war with large increases in military assistance and more American advisers."

The United States must understand that "the primary issue in El Salvador is the domestic political and economic structure of the country, not the role of the Soviet Union or Cuba in Central America," and, instead of being "fixated on military solutions," should seek a diplomatic and political solution "in concert with key nations like Venezuela, Mexico and our European allies."