EL PAISNAL, EL SALVADOR -- Standing stiffly on the bridge over the Rio Sucio, Col. Leopoldo Antonio Hernandez saluted smartly as a band played the national anthem. His pistol holstered, he clasped a pair of scissors.

Hernandez's contribution to the seven-year-old war against El Salvador's leftist guerrillas this particular morning was a ribbon-cutting ceremony formally reopening a dirt road recently cleared by the Army.

The colonel, commander of the 1st Infantry Brigade, told residents that transit across the Rio Sucio, or Dirty River, meant a victory over the rebels.

About 10 miles to the southeast, meanwhile, on the forested slopes of the Guazapa Volcano, units of the Farabundo Marti National Liberation Front (known as FMLN from its Spanish title) are trying to reestablish bases around the volcano. And Salvadoran soldiers, backed by planes and helicopter gunships, are trying to clear them out.

In that year-old campaign called Operation Phoenix, said Hernandez, the military has killed 211 guerrillas while losing 31 soldiers. Another 491 were wounded, including 397 by FMLN mines, he added.

The ribbon-cutting ceremony and Operation Phoenix represent two sides of a civil war that, more than seven years after it started, grinds on with no end in sight.

This, diplomatic and military sources here agree, is still the "real war" in Central America. While the guerrilla conflict in Nicaragua ostensibly involves more combatants now and has captured much greater U.S. attention, it is in El Salvador that the stronger insurgency is found.

"In terms of an active insurgency, there is nothing to compare with this," said a military analyst here.

It is a war marked by continually evolving tactics. In the last couple of years, both sides have broken their fighting forces down into smaller units to cope with what the other is doing. The guerrillas seem to be veering away from battles for territorial gain and overall military victory toward attacks that will affect the national economy. They call for the government to share power.

But a resurgence of major guerrilla operations this year appears to have sent a defiant message that the U.S. policy objective of turning the war into a "low-intensity conflict" cannot be assured.

In early January, the rebels massed as many as 400 fighters for a prolonged attack on the town of Osicala in the mountainous province of Morazan a few miles south of Torola River, which marks the de facto boundary of a rebel stronghold in the northern part of the province bordering Honduras.

Last month, the guerrillas struck again, attacking the town of Delicias de Concepcion a few miles south of Osicala and ambushing government reinforcements four times along the road to the town from the provincial capital at San Francisco de Gotera. One ambush occurred just outside that town, which also is headquarters for the military command in Morazan.

In addition, the guerrillas have brought nationwide transportation to a halt three times this year with threats to attack any vehicles using the roads. These "strikes," which the FMLN has begun declaring at a faster rate this year than the seven called last year, have been effective for the first time in the western part of the country, where the guerrillas traditionally have had less influence.

Mysterious incidents in San Salvador also have raised questions about an increase in guerrilla activity in the capital. Disarray following a devastating earthquake last Oct. 10, which killed about 1,500 people and left 250,000 homeless, is thought to have presented the FMLN with an opportunity to infiltrate the capital. The military has said it captured documents revealing plans for increased urban sabotage.

Guerrillas claimed responsibility for hijacking two buses and shooting out their tires in January. In February, the armed forces chief, Gen. Adolfo Blandon, blamed the FMLN for fires at three supermarkets and a movie theater. This month, a suspected guerrilla was wounded in a shootout with Salvadoran security men guarding the U.S. Embassy.

In the latest incident, gunmen used automatic weapons and grenade launchers last week to attack the house of Guillermo Guevara Lacayo, the president of the Legislative Assembly and a leader of the Christian Democratic Party of President Jose Napoleon Duarte. The attack caused damage but no injuries. The gunmen left a note claiming it was the work of the FMLN, but party leaders expressed suspicions that right-wing opponents were responsible.

It is a measure of the difficulties facing Duarte, diplomatic sources said, that the government cannot be sure whether the extreme left or the extreme right carried out the attack in a residential neighborhood of the capital.

"No matter who was responsible, it all adds up to nervousness and more destabilization," said a West European diplomat. In the process, he said, Duarte's government has been weakening, and the Army has been playing a greater role in civilian affairs.

In an effort to win over citizens, the military is dedicating increasing efforts to a U.S.-financed civic action program called United to Reconstruct. Its aim is to change the military's image as a force linked with brutal repression and to attack some of the causes of the insurgency.

Both sides seem to be devoting more attention to political and propaganda work aimed at winning over the populace. One result, according to human rights investigators here, is some progress toward "humanizing" a conflict that has claimed an estimated 62,000 lives since 1979.

Prisoner exchanges have been organized in recent weeks. The government has allowed more than 40 wounded rebels to be evacuated for medical treatment, most of them to Cuba, and killings by right-wing "death squads" have dropped.

The strength of the FMLN has dwindled to an estimated 6,000 fighters since the early 1980s, when it was believed to field as many as 11,000. But the rebels have proven they can still hold some territory, run shadow local governments, carry out widespread sabotage operations and mass forces to hit military targets.

The big difference in the war from a few years ago, according to military and diplomatic sources, has been the vast improvement in the capabilities of the Salvadoran armed forces. The military has more than quadrupled in size since the early days of the war, when 12,000 to 14,000 soldiers fought the rebels almost evenly matched in major battles.

Now the armed forces number slightly more than 56,000 troops, including nearly 39,000 in the Army, military sources said. An additional 18,000 to 22,000 are members of local civil defense units posted in about 110 communities across the country, the sources said.

The troops are better equipped and better trained, the sources said, thanks to massive U.S. aid that helps finance a military budget of more than $100 million a year.

A crucial factor in the improved performance has been the Air Force, especially its nearly 80 U.S.-supplied helicopters. Along with 11 A37 bombers and 12 C47 gunships, the helicopters have given the military greater mobility and limited the ability of the guerrillas to carry out massive attacks.

In a change of tactics to adapt to this new situation, the guerrillas at the end of 1984 began to break down into smaller units to avoid detection by the military's air power. But a result was that the rebels' leadership was stretched thin, and the insurgency "went through a bad adjustment period," as one military source described it. Then, to counter the shift in tactics, the military also began to break its forces down into smaller units in 1986 and experienced similar problems.

While there is no immediate prospect of the guerrillas' winning the war, the outcome of a relentless weakening of the government and the economy through the FMLN's long-term war of attrition remains uncertain.