President Jose Napoleon Duarte has forecast modest gains for his Christian Democratic Party in Sunday's nationwide elections and disputed reports that the U.S. government had cooled its support for him in the current campaign.

Duarte, in an interview last night, said U.S. policy has been, and still is, to support El Salvador's "democratic process" rather than any specific party. He said his Christian Democratic Party did not receive any U.S. government funds in last year's presidential elections here. He said he did not know whether unions or other groups supporting him received covert CIA support as reported by congressional and administration sources.

The U.S. government says it is not providing CIA funds to help any Salvadoran candidate this year, and several recent U.S. media reports have cited this policy and other indications as signaling that Washington has distanced itself a bit from Duarte.

Two well-placed sources, who confirmed that U.S. funds helped the Christian Democrats last year, said the policy change this year reflected a U.S. perception that El Salvador's far right was less of a threat than a year ago and that U.S. intervention in the campaign thus was less urgent. CIA assistance last year was aimed primarily at stopping Duarte's main rival for the presidency, Robert D'Aubuisson, whose extremism was viewed as a threat to democracy here, they indicated.

"If you view support for Duarte in 1984 in the context of trying to oppose a dangerous force outside the democratic process, and if that force is not as dangerous in 1985, then inaction becomes more clear and justified," one of the sources said.

The Reagan administration also appears to be content with the conservative parties' current control of the Legislative Assembly, which provides a counterweight to the Christian Democratic president and Cabinet, U.S. and Salvadoran political observers said. U.S. officials frequently have said that it is important to give the right wing a voice in governing and thus help discourage it from pursuing violent tactics.

Sunday's elections, which will choose a new Legislative Assembly and new municipal governments nationwide, are the first referendum on Duarte's nine-month-old administration and will determine the balance of power among El Salvador's political parties for the next three years.

Duarte said that "optimists" in his party were forecasting that it would increase its representation in the assembly from 24 seats to between 30 and 34, which would give it effective control of the 60-seat legislature.

"Thirty is the magic number, because then nothing can be done without us," Duarte said.

But the president expressed doubt that the party would do that well and suggested that the Christian Democrats were unlikely to oust the current conservative majority in the legislature.

"I am on the pessimistic side. I say that we will get between 26 and 29," the president said. He left open the possibility that he might enter a coalition with a rival conservative party if necessary to gain control of the assembly, although he said that the Christian Democrats would not compromise on principles to do so.

Some political analysts here have said the Christian Democrats will do well to hold on to the 24 seats they already have and even have suggested that the conservatives have a chance to win 40 seats and thus gain legislative power to override presidential vetoes.

In a 90-minute interview in his office, Duarte also made the following points:

The 35,000-man Army will be increased by 3,000 more troops this year and the 15,000-man military security forces will be increased by 1,800, he said. Duarte said the Army is now taking many more offensive initiatives than in the past and is no longer letting the guerrillas decide where and when battles are fought. The Army is "not in the forts anymore. It is on the offensive, looking for the guerrilla camps," Duarte said.

* Virtually the entire Army will be patrolling all over the country on election day, and Duarte anticipates left-wing guerrilla attacks to attempt to disrupt the voting.

* Duarte also expressed concern over what he called the "incapacity" of the conservative-dominated Central Elections Council, which is the national organization charged with holding the election and counting the ballots.

"I don't know whether they'll be completely prepared for the election," Duarte said.

Noting that the conservatives outvote the Christian Democrats 2-to-1 on the electoral council, he said: "There is no question that the system presents the possibility for fraud. The only defense is the political parties' poll watchers."

* Asked if U.S. support for Nicaraguan antigovernment rebels was easing military pressure in his country, Duarte said: "We cannot express a position concerning activities to support guerrillas inside Nicaragua, because if we do so it would be to accept the activities of Nicaragua in supporting guerrillas in El Salvador."

But he also said: "We need a barrier, somehow, so there is no flow of arms to El Salvador from Nicaragua," and the Nicaraguan insurgents, along with naval patrols and radar, "form part of that barrier."

* After the elections, Duarte said, he will take "some actions to strengthen the dialogue" that he launched in October with left-wing guerrillas. He declined to provide details, but his foreign minister has said that a third round of talks would be held after the election.