The Post urges the government of Nicaragua to negotiate with the CIA-supported contras, who have been fighting for four years to overthrow it ("A Fair Offer to the Sandinistas," editorial, March 17).

My government believes in negotiations, and is committed to seeking a peaceful solution to the current crisis through genuine negotiations with its adversaries, both foreign and domestic. We are active participants in the Contadora process (we alone accepted the Contadora peace proposal last September); we were participating in the Manzanillo talks; and we are carrying on a dialogue with the civilian opposition within Nicaragua. But we will never negotiate with the contras. Here is why:

1.The contras are led by officers of the hated Guardia Nacional, the main prop of the Somoza dictatorship that brutalized the Nicaraguan people for more than 40 years until our Sandinista Revolution threw them out in July 1979. This is confirmed by the U.S. Defense Intelligence Agency, which has reported that the FDN, the main contra group, is "led by Col. Enrique V. Bermudez -- former GN member and last Nicaraguan military attach,e to the U.S. under the government of President Anastasio Somoza -- and by other ex-GN officers." All key military positions are filled by former GN officers, including, Col. Ricardo Lau -- chief of contra counterintelligence, who, The Post recently reported, participated in the murder of Salvadoran Archbishop Oscar Romero.

As revealed by contra commanders to Post reporter Edward Cody (Feb. 28), the civilians who comprise the FDN's "political directorate" were actually handpicked by the CIA for the sole purpose of cleaning up the contras' image. These front men, who are trotted out from time to time to lobby Congress and meet with editorial boards of major newspapers, have no influence whatever. The Somocistas have all the guns.

2.The contras are terrorists whose attacks are directed primarily against our civilian population. From their bases in Honduras and Costa Rica, they penetrate our territory and murder, torture, mutilate, kidnap and abuse defenseless women, children and men. They destroy farms, health centers, food storage depots and schools. Recent reports by Americas Watch and the International Human Rights Law Group -- respected American human- rights organizations -- confirm dozens of My Lai- type atrocities by contra forces and accuse the contras of a deliberate campaign of terror against civilians. Official reports from Honduras accuse the contras of murdering civilians there. And now we see that the contras were responsible even for the killing of Archbishop Romero.

3.The contras are not an indigenous rebel group, but a collection of mercenaries recruited, paid, armed and directed by the CIA, and they would cease to exist without U.S. support. The Post simply ignores the facts when it says the United States is not the cause of the armed conflict in Nicaragua. In November 1981, when the CIA received President Reagan's authorization to create a counterrevolutionary army to overthrow the Nicaraguan government, there were only a few hundred ex-GN soldiers staging sporadic raids on farms along the border. Their principal occupations were cattle-rustling and extortion. It was the CIA, spending more than $100 million of the American taxpayers' money, that created the current 10,000-man force.

4.Notwithstanding the foregoing, my government has already made a fair offer to the contras, including the right to return to Nicaragua and run for elected office. On Jan. 22, the government decreed a generl amnesty for all contras, without exception, including their military and political leaders. The decree allows them to return to Nicaragua and to participate fully in the social and political life of the country. My government has also committed itself to repeal the state of emergency (imposed in March 1982 in direct response to the war) and fully restore all of the civil and political rights that the Sandinista Revolution promised the Nicaraguan people, including freedom of the press, now partially limited because of the war. To accept the benefits of this amnesty the contras need do just one thing: lay down their arms.

If they are really fighting for democracy, as their propagandists claim, they can have it. It has already been offered to them. It is, by any objective standard, a fair offer. It could lead to a just and lasting peace and to the complete democratization of our country. That is what we wish.

The "offer" made by the contras is not an offer at all. It is another of the CIA's propaganda moves to make the contras appear to be peace-loving democrats -- which they are not -- and to justify more congressional funding for this illegal and immoral war.