All spruced up, the city looks like a combination of socialist realism and American kitsch. Indoor American ads for Pepsi, one of the U.S. advertising sponsors, are as commonplace as outdoor Soviet posters reading, "sport," "peace" and "friendship."

The locals have been unsparing in their enthusiasm for the U.S. athletes at the Goodwill Games, now in their second week. During the men's marathon July 6, the crowd gathered along the sidelines let the Soviet athletes pass in silence. But when the group of U.S. marathoners running for world hunger dragged up the rear, shouting "mir" and "spasibo" -- Russian for "peace" and "thank you" -- the crowd chanted and applauded them along.

As Joyce Joyner, a 24-year-old American, prepared to run her way toward a world record in the seven-event heptathlon here last Monday, a Soviet announcer broke out of his placid tone to cheer her on. After announcing the competitors in the 800-meter race, he said, "and all our hopes are for Joyce to make it."

Ted Turner, owner of Turner Broadcasting System, which is cosponsoring the event with the Soviet Union, has been hailed and widely profiled in the nation's press. He has made the pages of Komsomolskaya Pravda and Sovietskaya Rossiya, among other newspapers, and has even been on state-controlled Soviet television.

"At the heat of the anti-Soviet hysteria fanned up by the Washington administration," Komsomolskaya Pravda said, "Ted Turner also put forward an initiative for all-around development of a dialogue between eastern and western journalists." Among other things, the paper concluded, this means "abandonment of purely American misunderstanding of the fact that there is a world beyond the U.S.A.'s boundaries."

Soviet enthusiasm over the event stems in part from the untapped excitement left over from when the U.S. boycotted the 1980 Moscow Olympics, and when most of the Soviet Bloc boycotted the 1984 Los Angeles games. These games are the first meeting between U.S. and Soviet athletes since the 1976 Montreal Olympics. About 500 American athletes are here for the competition.

Sometimes the excitement turns berserk. When Edwin Moses, the 400-meter world-record-holding hurdler turned away Soviet autograph seekers after his victory in the event Wednesday night, one tried to jump into the front seat of his car with him.

Sometimes the excitement takes strange turns. After Canadian sprinter Ben Johnson won the 100-meter race Wednesday night, leaving U.S. Olympic star Carl Lewis in third place, some Soviets seemed to think that leaving an American in the dust gave him special status as a political spokesman.

As Johnson beamed in his moment of victory, Soviet journalists gathered to ask his views on peace.

THE SOVIETS have made other unusual displays of support. Despite tight security, some journalists usually banned from entering the Soviet Union have made it through.

In an unprecedented move, the Soviet Union granted several Voice of America correspondents visas to cover the games. VOA is the U.S. government-funded radio news service whose Russian language broadcasts, beamed in from the West, are jammed by Soviet authorities. Dispatching reports about the games out of the Soviet Union has posed no problems, one VOA correspondent here said. However, on their way back into the country over wireless telegraph, his reports are still jammed, he said.

The Reagan administration also granted Turner's company special permission to bring along two pieces of high technology television equipment that are on the list of items usually barred from export to the Soviet Union.

One is a "paint-box," a $200,000 computer that allows an operator to draw images and animation in seconds and store them for television transmission. "I can just imagine what kinds of things the Soviet military could do with that," said Robert Wussler, the company executive in charge of planning the games. The other is a $125,000 computer that allows easy tinkering with television graphics.

Both items, common in big-city American television studios, sit in a massive control area the company moved here and then sold to Moscow for $8 million. The company has gone to lengths to keep the machinery out of Soviet hands -- even hiring American students to sleep with it before it was unpacked. But, "every once in a while a Soviet will come in to sneak a peek," Wussler said.

There are some other, lighter home touches making their way to the games. For some of the company's workers here, imported granola bars and soft drinks were not enough to satisfy their cravings. Last week they placed a take-out pizza order -- to Pizza Hut in New York. The company plans to fly in 100 pies -- complete with anchovies, sausages, and pepperoni -- next Wednesday.

THE GAMES have also provided a training field for Soviet security forces. Moscow is now awash with plainclothed officers and officers in a variety of colored uniforms: state militia are in blue, military police are in green, and the special forces who ring the Lenin Stadium running track are wearing blue-and-white beenies and white T-shirts.

Numbering in the tens of thousands, the security forces' presence is heavier than during the 1980 Olympics or the International Youth Festival in 1985, according to Muscovites. The forces include Interior Ministry soldiers, the equivalent of riot police, who have not been seen on active duty in Moscow since the political unrest following Joseph Stalin's death in 1953. During the games, they are patrolling the city's subway system.

On some street corners, four or more militiamen gather where one is usually enough in other times. So many were assigned to patrol Gorki, the sprawling amusement park in central Moscow, that some of them, yielding to temptation, decided to amuse themselves over the weekend by rowing around the lake.

Cadets have been brought in from as far away as the Soviet Far East for on-the-job training, according to Soviet officials. The black-haired, dark-eyed Siberians assigned to guard the games' press center contrast visibly with the blond-haired and blue-eyed forces that stand out as typical Russians.

Moscow has been effectively sealed off from the usual 2 million daily visitors and Soviet tourists. The reason, some Soviet officials have explained, is to make sure nothing goes wrong. Special measures to keep order are not uncommon during special events hosted in the Soviet capital, which provide the occasion for the kind of mixing between natives and foreigners officially frowned upon