Francisco Jose Guerrero, his rhetoric as rotund as his body, raised stubby arms into the midday heat and shouted to the gathered peasants to hold up the straw hats that are the symbol of their class.

"Arriba, arriba," they cheered back at the podium, waving the headgear cowboy-style to strains of the Marlboro theme blaring from disco-strength speakers in the corner of Sensuntepeque's courtyard meeting hall.

Guerrero was winding up another of his weekly political rallies to attract grass-roots attention for the presidential candidacy he hopes will become El Salvador's middle way between the rightists of former major Roberto D'Aubuisson's National Republican Alliance (Arena) party and the reformists of former president Jose Napoleon Duarte's Christian Democratic Party.

The question of whether Guerrero can defy the odds and succeed is being asked with increasing frequency these days in the political discussions in San Salvador as presidential elections approach. U.S. diplomats are among those asking, according to reliable reports, because of fears in Washington that an electoral victory by either of the two supposed front-runners, Duarte and D'Aubuisson, could end up presenting the Reagan administration with even more problems here than it already has.

The United States, which has made the creation of a democratic system the linchpin of its anticommunist policy in El Salvador, had suggested that the elections be held before the end of this year. That idea has now been abandoned as impractical.

A constituent assembly elected in March last year is drafting a constitution that is not expected to be finished until the middle of September, and an assembly official said presidential elections could take place in February or March. Legislative elections might be postponed until 1985.

The broad leftist coalition that sponsors an insurgency threatening the U.S.-backed government has opposed the plans for elections, saying the violent atmosphere makes it impossible for them to participate safely.

Both front-running candidates have drawbacks, in the view of U.S. diplomats here.

Christian Democrat Duarte, president of a ruling junta for two years until April last year, has become closely identified with controversial reforms such as nationalizations and land redistribution. As a result, he has earned bitter enemies in parts of the officer corps and among right-wing businessmen. The fears in Washington revolve around the possibility that his election could provoke such resentment in these sectors that it could lead to more divisiveness, an upsurge in rightist terrorism or perhaps even plotting in the military.

D'Aubuisson, president of the constituent assembly, is a retired security officer described by former U.S. ambassador Robert White as a pathological killer associated with rightist death squads.

Although he has sought in recent months to present a more moderate image, D'Aubuisson as president would be likely to complicate administration efforts to portray U.S. intervention here as the promotion of democracy and better government for the 5 million inhabitants of El Salvador.

Guerrero, Provisional President Alvaro Magana's top aide, has emerged recently from his relatively obscure post as a "precandidate" of the National Conciliation Party with what Salvadoran politicians say is Magana's encouragement.

His rallies around the country formally are designed to make his nomination official in each provincial party organization. But they also are the initial rounds of a presidential campaign centered on presenting him as the candidate who can avoid divisions from the right or left ends of the political spectrum.

"Conciliation is synonymous with peace," he told the 500 faithful in this provincial capital 50 miles northeast of San Salvador. "How can we speak of peace without speaking first of conciliation? And our party is the party of national conciliation."

The party backed a series of military rulers for two decades until Col. Carlos Humberto Romero was overthrown by reform-minded officers in October 1979. As one of its founders, Guerrero was president of the assembly and foreign minister until he was dumped in an intraparty squabble.

His bet now is that Salvadoran voters will remember him well enough to propel him into the presidency, and that the military and the United States will accept him as sufficiently conservative to be reliable and sufficiently moderate to be presentable.

According to Salvadoran political sources, Guerrero's electoral strategy is based on two rounds of voting. In the first, Duarte, candidate of the country's largest party, would win a plurality but not the necessary majority. Guerrero, having won back his party's voters who went over in March 1982 to D'Aubuisson's Arena, would finish second behind Duarte. D'Aubuisson, his strength ebbing in the countryside, would finish third.

In the second round, the calculation goes, Arena backers would be forced to fall in line behind Guerrero because Duarte--anathema to many of them--would be seen as an impossible alternative. This would propel Guerrero into a majority as the candidate of a right united in spite of itself.

Guerrero acknowledges that such an outcome depends on his ability to attract support from traditional National Conciliation Party voters who sided with D'Aubuisson's Arena in the 1982 vote for the constituent assembly.

While insisting that predictions are mostly guesswork at this stage, political observers here agree that Arena's appeal in the towns and hamlets outside San Salvador appears to be dropping.

"The danger with this idea is that Duarte could win a majority of the vote in the first round if the right is split between two candidates," said a conservative businessman analyzing Guerrero's strategy.

Christian Democratic leaders contend that this is precisely what is likely to happen. As a result, they charge, rightist business interests have discussed the idea of postponing presidential elections until 1985 to give the right wing more time to unify behind a single candidate.

"This is something real, that ANEP the National Private Enterprise Association wants to delay the elections, because they are afraid we will win," said Julio Adolfo Rey Prendes, the party's assembly leader.

Juan Vicente (Johnny) Maldonado, an officer of the private enterprise association, said, however, that El Salvador's business leaders want elections as early as possible to give the country a stable course and permit recovery of the war-devastated economy.

At the same time, he accepted a widely held belief that Duarte's strength is likely to diminish the longer elections are put off.

Last spring's U.S. suggestion for elections in December, carried here by special envoy Richard Stone and announced by Magana at U.S. urging, has now been abandoned as impractical by U.S. and Salvadoran officials.

The United States turned over $3.4 million in special aid Tuesday to help the Salvadoran Central Election Council organize voting. But final dates are to be set in the constitution being debated in assembly discussions likely to continue at least through the middle of September, the head of the constitutional drafting committee said.

Although fortunes in the civil war could shift suddenly and throw these expectations off track, for now political and foreign observers list Duarte, D'Aubuisson and Guerrero as the main presidential candidates.

Duarte and Guerrero already are running hard. D'Aubuisson still has not declared his candidacy. Salvadoran and foreign observers agree that the nomination is his for the asking, however, and most predict he will ask in the weeks to come.