The Hopi Indian Reservation, created in 1882, was not taken from the Navajo reservation as reported yesterday. The Navajo Indian reservation at the time lay to the east, and was later expanded to surround the 2.5-million-acre triangle of land carved out for the Hopis by President Chester A. Arthur

New leaders of the Navajo and Hopi Indian tribes, after centuries of war and years of court fights, are moving to resolve a historic dispute over 1.8 million acres of Arizona that both claim as ancestral homes.

The tribes' leaders had not met amicably for generations until several months ago, when Navajos and Hopis both elected new chairmen who, it turned out, had gone to high school together. Navajo leader Peterson Zah and Hopi chairman Ivan Sidney decided to try as friends to talk out the issue that warriors, presidents, congressmen, lawyers and their predecessors couldn't settle.

"It still feels unbelievable," said Zah. "For us, it's like the Arabs and the Israelis."

This week Zah and Sidney came to Washington with word of a breakthrough. They were hosts at a reception Wednesday night at the Capitol, where members of Congress and federal bureaucrats watched in stunned silence as Sidney presented Zah with a book on Hopi land and culture. "The book shows what we're trying to do," Sidney said. "We're trying to understand each other as people. Last week I went with him to a Navajo wedding. Pete Zah and I are both traditional Indians. The traditions teach that the sun goes down at the end of the day, and with it some of the bad memories. Then the sun comes up and it's a new day. We believe this. We believe we can compromise."

Zah and Sidney are asking the federal government to put aside for now the issue of who can live on the land--Congress had given 8,000 Navajos a 1986 deadline to move out. They say they want to turn their efforts to making the depressed area more livable for people of both tribes--to build roads, schools, hospitals and more--and to use the extra time to learn to live together.

All they need from Washington for now, they say, is money and time. "What we're saying," said Zah, "is let's take it away from the courts, away from the lawyers, away from the Congress. Ten presidents of the United States have tried to solve this. It has gone through 18 or 19 secretaries of the interior. We've spent millions of dollars in lawyers' fees fighting each other and our people got to a state where they hate each other. Yet we're both minorities. We're both native Americans. We shouldn't be fighting like this."

The Navajos and Hopis have fought over the disputed chunk of northeastern Arizona for almost 500 years. In 1882 President Chester A. Arthur carved a 2.5-million-acre rectangle out of the vast Navajo reservation to be the Hopi homeland. The tribes then hired lawyers, and in 1962 the courts ruled that a 1.8-million-acre diamond inside the rectangle belonged to both tribes.

In 1974 Congress partitioned the shared area, giving Navajos and Hopis on the wrong side of the line until 1986 to move, a project expected to cost the federal government $180 million and one that has caused emotional anguish for both tribes by forcing them to leave lands considered sacred.

More than 8,000 Navajos have yet to move, and many of them lack the modern-day skills to start a new life elsewhere. Navajos marked for relocation have requested psychological counseling at eight times the rate of other Navajos, federal health officials said. The prime victims of the hostility, Zah and Sidney now say, are families in the disputed territory. While the two tribal governments feuded there was a virtual freeze on construction of roads, schools, hospitals and other facilities. It takes hours to travel bumpy dirt roads to jobs in coal mines or offices.

"We couldn't build a road because neither tribe would give a right of way to the other," Zah said. "The Navajos asked for a right of way and the Hopis said no. The Hopis asked the Navajos and we said no. The people there were just stuck in the mud." The path to reconciliation must begin, Zah and Sidney say, with something known as the Turquoise Trail. They propose to build a 55-mile highway from the Hopi town of Second Mesa to the large Peabody Coal Mine in Navajo country.

Tribal council members deliberated for months over the route, sketching three lines on a map--one yellow, one red, one blue. They chose the blue line, and christened it the Turquoise Trail for the stone's symbolism to the two tribes. Both use turquoise in religious ceremonies, and traditional artisans of both tribes craft it into their famous jewelry and metal work.

Their formal proposal estimates that they will need $43 million for the road "to bring an area, frozen in time because of the present uncertainties, into the present decade." In a world of predominantly dirt roads, they said, a highway is a path to jobs, education, health facilities and the outside world.

They took their message this week to their congressional delegations and to Interior Secretary James G. Watt, trustee for the Indians, who tentatively agreed to support the bids for federal aid and extra time to resolve differences.

Enormous problems remain unresolved--how to change the congressional deadline, how to answer the Hopi land claims--but for now, all sides appear content to stress the positives. "What they're doing takes tremendous political courage," said an aide to Senate Budget Committee Chairman Pete V. Domenici (R-N.M.), who vowed to work with the two leaders. "If these two men are willing to take this kind of risk, it's up to the politicians and bureaucrats in Washington to back them up."

Zah and Sidney say they hope the road is only the beginning. They say they will also push for money to improve schools and hospitals. And they will unite, Zah says, to try to force Peabody Coal to pay them both higher royalties. The company now pays 15 cents per ton of Navajo or Hopi coal, Zah said.

"It takes statesmen to resolve a hard issue like this," said Sidney, beaming as he stood beside the strapping Zah. "That's what Pete Zah is: a statesman. Now ask him what he thinks of me."

"He is my friend," Zah said.