The steadfast refusal of the leader of the southern Sudanese insurrection to negotiate with the new central authorities has aroused fears of a major upheaval in the strategic Horn of Africa.

Not since once pro-American Ethiopia opted for the Soviet Union in the mid-1970s has the stage appeared set for such a potentially momentous restructuring of power and influence in the region, according to diplomats and Sudanese analysts.

At stake is a possible shift by Sudan from its orientation toward the United States and Egypt to closer ties with Soviet-backed Ethiopia and Libya, all in an effort by the new government in Khartoum to get rid of the rebellion in the country's south.

Nearly three weeks after president Jaafar Nimeri was ousted, analysts tentatively have concluded that John Garang, leader of the Sudanese People's Liberation Movement, seems determined to bring down the fledgling civilian-military transitional government here.

Far from from ending his two-year-old insurrection even though his archenemy Nimeri has been overthrown, Garang stubbornly has warned that his forces will expand the war soon by fighting in the north as well as the south.

Barring a change of heart, Garang gives every indication of maintaining his refusal to deal with the transitional military council or the civilian Cabinet, some of whose members still hope they would be more acceptable interlocutors than the Army.

Some Sudanese fear that the military council's lack of political experience and imagination prevented them from moving fast after the April 6 coup to cut the ground out from under Garang.

Now the council appears bent on forcing Garang into negotiations by initiating high-level contacts with previously hostile Libya and Ethiopia in hopes of persuading them to end financial and military support for his rebellion.

The absence of hard information, compounded by Garang's penchant for remaining incognito in Ethiopia, which some Sudanese interpret as total subservience to the government there, has prompted widespread speculation about the price demanded for such cooperation.

Analysts predicted that Libya would press for a major change in the Sudan's pro-Egyptian and pro-American policies in return for helping the Khartoum authorities.

Marxist Ethiopia, backed by its Soviet allies, was expected to make similar demands and ask Khartoum to restrict the Sudan-based activities of separatist rebels from Ethiopia's Tigray and Eritrea provinces.

In any case, many Sudanese credit Garang, an American-educated former Army colonel, with holding the key to the solutions to all the country's major problems -- improved relations with its neighbors, renewed work on oil and water projects interrupted by the fighting and the estimated $500,000 to $1 million daily cost of the war on the finances of this technically bankrupt nation.

Yet few northerners appear to have understood the message of Garang's daily broadcasts over a clandestine radio station located in Ethiopia in which he proclaims that he is prepared for a long struggle to reorder power in a future socialist Sudan.

An insistent leitmotif argues that the Sudan is really an African rather than an Arab country and that power must be wrested from the ruling Arab elite in Khartoum.

Increasingly since Nimeri's downfall, Garang's broadcasts harp on the necessity to decentralize, not just in his native Christian and animist south, but throughout the continent's largest country where demographers estimate that less than half the population is Arab.

Some foreign analysts say Sudan is rapidly being so exhausted by famine, financial crisis and the war that Garang's "black power" dreams may for the first time be within his grasp.

"Six months ago I would have said it was impossible for a southerner like Garang to take power," a European diplomat remarked, "now I think it's possible but only after the Sudan goes through a long, painful process of unraveling."

He was not the only observer to wonder if the apparent smooth takeover by moderate generals Nimeri himself had appointed can be more than temporary.

"I keep remembering John Reed's description of the Russian Revolution in 'Ten Days That Shook the World,' " another diplomat said, "and wondering when the local equivalent of the czarist guard dancing with the cigarette factory worker is going to end."

Like many other northern Moslem politicians, Sadiq Mahdi, leader of the Umma Party with strong roots in the western Sudan, said he feared that Garang, either by design or ignorance, "failed to understand that Nimeri's downfall was not just another 'classic coup' without massive popular support.

In an interview, he warned that if Garang sought "ultimate confrontation" with established Sudanese society, the outcome would be a "more extremist Arab and Islamic backlash."

Such an outcome could destroy, he said, hopes both for a return to working parliamentary democracy and the country's reputation for tolerance.

Other Sudanese fear that Garang's intransigence may provoke a second coup within the Army and sweep away the moderate generals who reluctantly took over from Nimeri and seem genuinely determined to return power to the civilians.

Some Khartoum University academics -- both northerners and southerners -- fear the lessons of the past still have not been understood. They recalled that in 1972 Nimeri ended a 17-year civil war in the south by granting local autonomy, only to destroy his own achievement two years ago by carving up the south into three provinces and imposing sharia, or koranic law, on its non-Moslem citizens.

"Sharia is a delayed action bomb threatening this regime," a diplomat remarked. Except for the Islamic fundamentalist minority, few Sudanese claim to understand why the military council failed to abolish sharia throughout the country immediately after taking power.

Nor is it well understood why the council excluded men close to Garang's thinking and instead appointed three less demanding token southerners to the civilian Cabinet.

"Garang is the symbol of northerners' mistaken policies and attititudes toward the south," a northern university professor said.