Faced with an overwhelming show of government force and the prospect of serious bloodshed, an Islamic fundamentalist leader who supports the movement to bring Egypt's western-style society under the rigid codes of Islamic law canceled a demonstration march on the presidential palace today moments before it was to begin.

The decision by Sheik Hafez Salama, as he faced lines of battle-dressed riot police, was a victory for the government of Egyptian President Hosni Mubarak. In recent months, Mubarak has faced rising demands from powerful fundamentalist groups for the immediate application of Islamic law, or sharia, throughout Egypt -- and mounting criticism from secular politicians for his reluctance to confront them.

Mubarak banned the march earlier this week and backed up his stand today with more than 1,000 soldiers and police, their shields, sticks, cattle prods and tear gas canisters at the ready on every side of Salama's Al Nur Mosque, where as many as 3,000 worshipers observed their noon prayers.

By 1 p.m., Salama apparently had stirred some of his male followers into a religious fervor as they assembled beneath banners proclaiming "We are with God, and God will help us destroy the infidel."

Salama's followers, mostly bearded and clad in Egypt's traditional kaftan-like robes and skullcaps, waved the Koran above their heads in the blistering sun. But they did not move out into Abbasia Square for the confrontation with police.

Salama, 60, looking frail in his red fez and soiled white linen jacket, announced suddenly that he would wait to see how Egypt's courts rule on his petitions to march legally.

In an interview afterward, Salama said the decision was taken at the last moment partly because of fears that some in the crowd sought to create a bloody incident, adding that his goal is peaceful protest.

Members of fundamentalist groups more radical then Salama's were in evidence amid the crowd before the prayers began. Several young men outside the mosque identified themselves as members of the Jihad organization, which was responsible for the the assassination of Egyptian President Anwar Sadat in 1981.

"The Islamic movement is the voice of Egyptian society," said a 24-year-old engineering student, adding that he had served a year and a half in prison as a member of Jihad. "Today is the beginning of total Islamic revolution."

Several Jihad members expressed contempt for the government's efforts to mollify them with moderate or partial implementation of Islamic law. They demand an Islamic republic led by religious men, like Ayatollah Ruhollah Khomeini's government in Iran. They scorned the idea of secular politicians attempting to keep control by adopting what they consider the trappings of Islamic fundamentalism.

There was no evidence that the Jihad people spoke for the crowd or for Salama. In a diverse crowd that seemed to be mostly working class, the issue on which people appeared to agree was not the overthrow of the government, which has been advocated by some, but the more limited goal of immediately applying Islamic law.

Strictly interpreted and enforced, the law put forth in the Koran and the teachings of the prophet Mohammed includes such measures as the abolition of interest payments, the amputation of hands and feet as punishment for thievery, the prohibition of alcoholic beverages and the stoning of adulterers.