The fire-lit street corner had drawn a festive crowd. Teen-agers pitched tires and tree branches into bonfires while children danced to a cacophonous beat of spoons and empty pots. Chanting marchers snaked along the barricaded pavements like revelers in a carnival.

But even in the first hours of antigovernment protests earlier this month, the poor neighborhood of La Legua had an air of desperation. Unemployed men gathered in sullen circles, and smashed paving stones were left in gutters for the expected arrival of police. Young boys killed time by inhaling glue from plastic bags.

"Look," a man shouted bitterly to passers-by, "that is what hunger does."

The volatile mixture of political exuberance and deep-rooted anger was only vaguely reflected in the debates of Chilean political leaders. But after five months of often violent demonstrations, the conditions of La Legua and other poor Santiago neighborhoods have emerged as an enduring fuel of political crisis for the government of Gen. Augusto Pinochet.

These vast shantytowns and working-class districts, spread in great arcs along the periphery of Santiago, have borne the worst of Chile's deep economic crisis. They have seen health care, education and even food slip out of their reach, and they hold the bulk of the city's nearly 500,000 unemployed.

Now, even as middle-class Chileans and centrist political leaders have appeared to lose enthusiasm for mass national protests, the spirit of rebellion in the poor poblaciones has only appeared to increase. Residents in La Legua and many other communities marched and built barricades for four consecutive nights in this month's protests, despite the opposition plan for only one day of peaceful protest.

"On the level of elites, there is less polarization," said Juan de Castro, the vicar general of Santiago's Roman Catholic Church. "But on the level of the poor, some sectors are much more polarized than before. Even without political leadership, their protests would go on."

While Pinochet's government has appeared to strengthen its political position with a move toward liberalization, the 1.3 million unemployed in Chile's population of 11.5 million have seen little hope of improvement.

"For these people, a job is more important than the political system," said Christian Frecht, the Catholic vicar of east Santiago. "They have very basic needs."

As a result, Chile's political crisis--like the one that led to the military coup of 1973--has begun to be shaped by a class dynamic. While recognizing mass protests as their most powerful weapon, centrist opposition leaders have played up fears that they may not be able to control insurrection by the poor .

"Our power to act to control the situation is extremely limited," said Gabriel Valdes, the president of the Christian Democratic Party and leader of the opposition Democratic Alliance. The poor, he said, "don't feel represented by political parties. Their explosion is coming--so the solutions cannot be superficial ones."

Pinochet's government, for its part, has sought to mobilize middle class fears into government support while turning the poor neighborhoods against each other. Government officials have urged the formation of vigilante squads by local residents, and progovernment community leaders have been featured on government-controlled media asking Pinochet for security measures against "vandalism and disorder."

Wednesday, Catholic Church officials held a news conference to attack what they said were coordinated efforts by police to provoke conflicts between poor neighborhoods by spreading rumors of attacks.

In many poor neighborhoods, the increasing tension has produced its own divisions. "All of us participated one way or another in the first protest," said Sergio Tapia, a store owner in La Legua. "But now that this is falling into violence and vandalism, a lot of people don't want anything to do with it."

In general, however, the mass protests against Pinochet appear to be deeply rooted.

"There are real reasons to protest," said Tapia. "All of us have been really affected by a bad economic situation."

While unemployment in Chile is currently reported at 33 percent of the work force, church reports say that 60 percent are unemployed in poor urban neighborhoods housing hundreds of thousands of people. These figures include the approximately 200,000 workers in Santiago enrolled in government-sponsored minimum employment programs, which pay a monthly salary of $25 to $50.

Even for those with jobs, a recent study by the Academy for Christian Humanism showed, minimum salaries have dropped in value by 26 percent in only two years, to the equivalent of $68 per month. To feed and house a family of four adequately, academy economists say, Chileans need at least $150 a month.

In the poor neighborhoods, these harsh facts have produced desperate--and sometimes ingenious--tactics for survival. Some families share food in locally organized "common pots," while others scrimp by baking their own bread in backyard ovens. Many live by day-to-day earnings eked from odd jobs or the sale of trinkets on street corners.

For poor urban families, this style of life has varied only relatively during decades of governments. But in a highly politicized society, even many poorly educated workers are quick to contrast military rule with previous democratic governments.

Under the leftist government of Salvador Allende, who died in the coup that brought the military to power 10 years ago, "there was chaos but people had money," said Mario, a 32-year-old worker in a minimum employment project who did not disclose his last name. "There was nothing to buy, but if you went and stood in line for a few blocks, you could buy your food. Now there is plenty of food, but no one has money to buy it."

That kind of sentiment has made poor neighborhoods fertile recruiting grounds for leftist parties. In La Legua, one of the most conflictive protest zones, political organization is dominated by the Chilean Communist Party along with the Movement for United Popular Action, another Marxist party. According to residents, even the violent Movement of the Revolutionary Left has influence, while there are few local leaders from Chile's centrist parties.

After more than 50 deaths in the first five national protests, many opposition leaders said last week that they would prefer not to call national demonstrations for a sixth month in October. But on the local level, a date for an October protest has already been set by leaders in several poor communities, residents said.

The effect of such pressure has been to push political party leaders away from possible agreements with Pinochet's government on a moderated move toward democracy.

"What the people in the slums are asking for is the resignation of Pinochet," said Valdes in an interview last week."We as political leaders cannot ignore it."

Even more seriously, many opposition leaders have begun to worry that Pinochet's ouster and the inauguration of a democratic government would not stem the popular discontent. According to opposition economists, even an aggressive economic reactivation program by a democratic government could only lower unemployment to 10 percent in five years.

"Within five or six months, we could have a state of popular insurrection here," said Jorge Lavandero, an outspoken opposition leader. "And it will be an explosion that could destroy any chance of peace in this country."