Washington is still deadlocked over funding for "contras" fighting the Nicaraguan government. In Managua, there is a deadlock in talks to bring opposition candidate Arturo Cruz into the elections. This perilous impasse could lead to wider war and U.S. intervention, the very fate Central Americans and opponents of funding to the contras wish to avoid. What happens in Washington could either harden or break the deadlock in Managua.

Now that the Senate has voted to defeat Sen. Daniel Inouye's amendment cutting off aid to the contras, there is a standoff between the Senate and House, and Republicans and Democrats. The administration wants funding to continue unabated; the opposition wants a definitive and irrevocable cutoff. Each side invokes important principles, such as self- determination, human rights and democracy. In part because of administration intransigence, the issue remains in an "all-or-nothing" limbo.

In Managua, too, there is deadlock. Last week Sandinista representative Bayardo Arce and Arturo Cruz reached a tentative agreement facilitated and guaranteed by the leaders of the Socialist International and the Contadora countries. Elections would be postponed until January, freedom of the press, unimpeded campaigning and a cease-fire in the contra war would be guaranteed. The Sandinistas have made concessions under the pressure of recent contra successes in the north and in response to congressional Democrats' and the Socialist International's intercessions on behalf of genuine elections. But negotiations were stalled again when the Sandinistas suddenly balked.

If Nicaragua is not helped out of this impasse, the country may not survive. Moscow has made it abundantly clear that it wil not pick up the Sandinistas' economic and military tab. Western Europe won't help out either, without credible elections. Genuine elections are the necessary first step to national reconciliation. Without them, an already polarized Nicaragua could slide into civil war. "And then," as Daniel Ortega himself, the Nicaraguan head of state, threatened Wednesday, "whole classes of people will disappear."

Civil war in Nicaragua could easily engulf its neighbors. Colombian President Belisario Betancur, the de facto leader of the Contadora group, has worked tirelessly for an agreement between the opposition and the Sandinista government. He knows that Contadora's fate also hinges on the Nicaraguan elections. Many believe that should Contadora fail, Washington would bring the matter before the OAS and then seek to invoke the Rio Treaty as the legal mechanism for a "collective" intervention in Nicaragua.

There is still a way out. The "contra" leaders announced recently that they would agee to a cease-fire through the election period. A bipartisan U.S. policy should reinforce the efforts of Nicaraguans and Contadora to avoid war. Any decision from Washington could tip the scales in the fragile negotiations in Nicaragua. Our best hope to avoid regional war and a national blood bath would be to suspend a decision on aid to the contras until after Nicaraguan elections. The Senate-House conference committee currently discussing the issue could break its deadlock by fencing off for later consideration the money that would be appropriated to the Contras. By the end of January the results of Contodra's efforts and of Nicaragua's and our own elections will be known.

When Congress reconvenes, it could employ expedited procedures for a joint resolution either to approve or phase out funding. By suspending funding, the United States would send a positive bipartisan signal in favor of democracy and nonintervention. America would be ting a peace process without removing incentives for the Sandinistas to come to terms with their domestic opposition.

This measure could quiet Daniel Ortega's recently expressed fears of a U.S. invasion. It is highly unlikely that President Reagan would invade Nicaragua during its election campaign. Postponed Nicaraguan elections would coincide with the reopening of Congress and thus preclude any December surprises.

The fate of a country -- even a region -- may be in the balance. This is not the kind of thing that should be determined in a last-minute rush to adjourn Congress. A pause would allow our country to debate this issue in our election campaign and permit Congress to take a fresh look by the end of January at the vexed and agonizing question of support for the contras. Aid to the contras was the outcome of a misguided approach.

There are powerful moral and legal arguments against using such assistance as an instrument of American policy. But now that the contras are a reality we should consider carefully when and how to terminate funding for them. Not only domestic sobriety but also the fate of Central America demand deliberation, not haste.