Along the broad boulevard Unter den Linden, East German soldiers and sailors held their torches aloft in the black stillness. A goose-stepping honor guard marched smartly in front of a flaming pit monument while two drummers prepared to beat a thunderous tattoo.

The trappings of Prussian militarism on display not far from the Brandenburg Gate last night evoked chilling images of the past, when Nazi soldiers marched on the same streets.

But the ceremony itself, unveiling a memorial to the victims of fascism on the eve of the 35th anniversary of the founding of the German Democratic Republic, was intended to deliver a different message -- that the East Germans had broken with the Nazi past by building a socialist state, while the legacy of fascism still thrived in the capitalist West.

That propaganda never has found much of an audience among the country's 17 million citizens. As the celebrations unfold this weekend under the slogan "The GDR -- My homeland," yet another throng of East Germans has besieged the West German Embassy in Prague to gain asylum in the West.

Besides those taking such desperate action to flee the country, about 500,000 East Germans have applied legally for exit permits, jeopardizing their jobs and homes and exposing themselves to harassment from authorities while they wait, sometimes for several years.

This year, in the largest exodus since the Berlin Wall was built in 1961, as many as 35,000 have been allowed to leave. The action was taken less out of magnanimity than a desire by the authorities to defuse dissent within the country, in the view of East Germans and foreign diplomatic sources interviewed here.

East Germans are well aware that their country's considerable economic achievements in recent years, loudly trumpeted by the government, have provided them with health care, free education and well-stocked stores that set standards for the Soviet Bloc.

Yet a mood of quiet despair permeates the population. There is a despondency born of resentment toward a rigid, militarized society and the overbearing presence of 400,000 Soviet soldiers -- and the feeling that next to nothing can be done about it.

Unlike other Soviet Bloc citizens, East Germans are tantalized by images and information from the West, since most of the country can watch West German television. The affluence and personal freedoms, especially the freedom to speak freely and travel with ease, that are portrayed nightly on their video screens only intensify their frustrations.

1984 has not been a happy year in East Germany. The boycott of the Olympics deprived the country of its grandest showcase for world recognition, disappointing not only the talented track and swimming stars but also citizens and government officials.

The dismay was so great, an East German coach said, that parents of the athletes walked out of a meeting last summer in Leipzig that was supposed to explain the rationale of the boycott.

The hostile relations between Moscow and Washington, the installation of new missiles in both German states and the spreading fear of nuclear holocaust seems to have overwhelmed hopes that a minidetente could still flourish alone between the two Germanys.

When East Germany's communist party chief and president, Erich Honecker, decided to postpone his planned trip to West Germany last month, it was another reminder that the destiny of the country, as well as of the leadership, is still determined by Moscow.

For 13 years, Honecker steadily has enhanced his power by reconciling popular desires with Moscow's demands. In what a Western diplomat described as "one of the most precisely managed societies," Honecker is said to be so solicitous of the public mood that he takes a personal interest in such amenities as making sure there are chocolates and oranges in store windows at Christmas time.

If only for economic reasons, the rapprochement with West Germany has been highly popular. East Germans realize that more trade, loans and grants underwrite their economic benefits, and perhaps may improve future prospects for easing travel restrictions.

After warning about a "new ice age" last year if missiles were deployed in West Germany, Honecker reversed himself and began advocating the need to "limit the damage" by striving to revive detente and dialogue among the small countries.

East German officials say that better economic relations with West Germany are intended to strengthen the country's role within the Soviet Bloc.

Since 70 percent of East Germany's machinery exports go to the Soviet Union, Honecker has argued that East Germany must look to the West to buy high techology in order to improve the quality of goods his country can provide the Soviet Union.

But he still pays scrupulous attention to Moscow's whims. When a Soviet press campaign suggested that a meeting between the two German leaders was too unsettling at this time, Honecker dutifully subordinated his longing to see his former boyhood home in the Saarland and followed Moscow's bidding.

"Once the Soviets made it clear things were moving too fast between the two Germanys, it was only a matter of Honecker finding the best way to climb off the limb," explained a senior diplomat in East Berlin. "There was no question of stepping out of line, because he has always been extremely loyal to Moscow."

Since dropping the visit, Honecker has muffled talk about detente in his recent speeches and joined in harsh attacks against West Germany's alleged desire to encroach upon the territories of its eastern neighbors.

Last week, in dedicating the Soviet House of Science and Culture in East Berlin, Honecker reminded his audience that his country's "inviolable" friendship with the Soviet Union was "a matter of the heart" for each East German citizen.

At 72, Honecker appears in excellent health and shows no signs of stepping down from power.

He has appointed intimate proteges to key positions in the Politburo, including heir apparent Egon Krenz, 47, as internal security chief, a powerful job that Honecker himself held.

Most important, he still appears in good graces with Moscow. Honecker and Soviet Foreign Minister Andrei Gromyko made a point of exchanging warm embraces before and after their speeches today.

But while Gromyko sharply attacked Bonn for trying to incorporate East Germany into a resurrected pan-German nation, Honecker refrained from directing any nasty comments toward Chancellor Helmut Kohl's government and insisted that "the German Reich perished in the fires of World War II."

Ever suspicious about seeing their most crucial ally succumb to the siren of German reunification, the Soviet Union has maintained control over East Germany not only through its extensive military presence, but also through a vast web of party, security and economic contacts. The Soviet ambassador is acknowledged to hold a de facto seat on East Germany's ruling Politburo.

Honecker and members of the party hierarchy realize that their abiding allegiance to the Soviet Union ultimately constitutes their sole guarantee of power.

Still, they have been striving to establish greater long-term political stability through broader public acceptance, seeking to reach beyond the ranks of party functionaries and blue-shirted members of the Free German Youth to woo the apathetic and disaffected majority.

A primary theme in the popularity crusade stresses that West Germany's materialistic culture only mimics American consumerism, while their less wealthy state bears the inheritance of the "good side" of German history and culture.

Such figures as Martin Luther, Frederick the Great and Otto von Bismarck, who were once despised as exploiters of workers and peasants, have been rehabilitated.

Books and anniversaries extol them as social progressives and forefathers of the German Democratic Republic.

Last year's 500th anniversary commemoration of Luther's birth was important because it fostered better relations between the communist party and its only rival institution, the Evangelical (German Protestant) Church.

The church still provides a crucial umbrella for pacifists. It discreetly supported opposition last year to the presence of Soviet SS20s as well as American Pershing II missiles in Europe.

But in recent months, church sources report, the peace campaign in East Germany has faded, as it has in West Germany.

Church leaders have taken pains to avoid provoking the government in an attempt to preserve the loosened restrictions on practicing their faith that they were permitted during the "Luther Year."

At a church synod last week in Greifswald, the meek agenda in the bishops' report angered some activists who want to apply pressure on the authorities to grant more freedom to travel.

Remarking dryly on the "my homeland" slogan bannered everywhere for the 35th anniversary, one cleric said East Germans might accept their country as their homeland "if they could occasionally see a little more than just this home."

The chafing restrictions on travel outside the Soviet Bloc for nearly all East Germans below retirement age is cited by refugees in the West as one of the chief reasons many East Germans decide to get out.

"We just want a chance to see a little of the outside world," said a young East Berliner, nervously fingering his scarf in the vast concrete stretch of Alexanderplatz. "The government should realize that most people would still come back, because this is where their homes and friends are."

Indeed, officials in the Ministry of Inter-German Affairs in Bonn say that about one-sixth of East German refugees who settle in the West eventually try to go back to East Germany. The refugees often complain about the hectic pace of life and the inability to develop trusting friendships in the West.

For many East Germans, the oppressiveness of the government nurtures a special sense of communal bonds among friends and neighbors, a sense of "us against them."

Dissident author Stefan Heym, who is tolerated by the regime despite a series of novels that have dealt with such taboo subjects as the workers' uprising of 1953 and the state security apparatus, said the authorities could ease dissatisfaction by "freeing people's minds to let them talk openly about the faults of this socialist system, which would go a long way toward correcting it."