KHARTOUM, SUDAN -- When Sadiq Mahdi was chosen last year as prime minister of Africa's largest country, there were hopes here and in western capitals that Sudan's many plagues of famine and civil war, of inept government and religious conflict might at last come to an end.

The new prime minister dressed in the long, snow-white galabia and turban of a Moslem imam. His moderate policies, eloquently explained to outsiders in his idiomatic American English, laid to rest western fears that this part-Arab, part-African country might fall under the spell of Islamic fundamentalists. The new leader, after all, was an Oxford graduate.

In the south of Sudan, African Christians warmed to Mahdi because he seemed sympathetic to their demands that the south be granted greater autonomy. He said that the country's harsh system of sharia, or Islamic law, which demanded amputations for petty crimes, should be tossed in "the dust-bin of history."

In the north, Arab Moslems saw Mahdi as a devout Islamic scholar who was born to wield power: He is the great-grandson of the north's greatest hero, the fabled Mahdi whose Ansar warriors routed the British in 1885.

Having poured billions of dollars into this strategically positioned nation, western donor governments saw Mahdi as the last, best hope to bring a measure of sanity to one of Africa's worst-managed economies.

After a year and a half in power, however, the 51-year-old Mahdi has proved himself an indecisive leader, in the view of a number of Sudanese politicians, analysts and western diplomats. For the most part, he has been unable to convert his eloquence into action.

More importantly, he has sent signals across this vast country, which is divided north and south along racial and religious fault lines, that he is less a secular leader than an Islamic one, less a national conciliator than a champion of the Arab north.

In an interview last week, Mahdi characterized the country's four-year civil war as "a nuisance."

"Of course it is costing us money, of course it is costing us lives. But it is like you have lost your finger. You don't die because you have lost your finger," he said. "The worst that can happen to the Sudan is a division between north and south."

The prime minister's comments on the war and the possible division of Sudan contrast sharply with his campaign statements last year, in which he made a speedy end to the war his top priority.

Nor does Mahdi's belief in Sudan's ability to survive protracted civil war square with the assessment of many leading Islamic and Christian politicians in the capital, Khartoum, or with that of western donors such as the United States.

Echoing a sentiment that is repeated again and again by Sudanese politicians and western diplomats, Hassan el Turabi, head of Sudan's fundamentalist National Islamic Front, said last week: "Sadiq forgets he is holding national public office. Nobody in the country seriously believes the war can continue indefinitely and Sudan can survive."

By arming Arab tribal militia with an unprecedented level of modern firepower, Mahdi's government appears to have exacerbated rather than reduced north-south hatreds. The fruit of this policy includes tribal massacres, the theft of millions of head of cattle and large-scale resumption of the ancient practice of inter-tribal slavery.

Many Sudanese politicians, as well as relief officials and senior western diplomats, say they see the escalation of north-south tribal fighting, Moslem against Christian, Arab against African, as the most worrisome, potentially destructive development in the country's recent history.

"This arming of the militia may lead Sudan to gradual disintegration," said Suleyman Baldo, a lecturer at Khartoum University and co-author of a report on a recent tribal massacre in central Sudan. "This is making reconciliation with the south practically impossible because of tribal bitterness."

At the same time, Mahdi has put off changes in the application of Islamic sharia law. On several occasions, he has set deadlines for reform, but they passed with no action. Rebels of the Sudanese People's Liberation Army (SPLA), who control most of southern Sudan, say that sharia must be eliminated before peace talks can begin.

Only in economic policy has Mahdi's government begun to act. Yet, while donor governments welcome his recent efforts to trim government spending, rationalize exchange rates and encourage farm exports, there is widespread skepticism among donors about Mahdi's long-term commitment to free-market reform.

It took his government more than a year to make the first move. In that year, spare parts, medicines and other essential imports all but disappeared from shops. International telecommunications lines were out for nearly three months. The black market boomed.

"The country went in exactly the wrong direction. It lost investment opportunities. It lost foreign aid flows," said Fareed A. Atabani, an economic consultant here.

Sudan is a formidably difficult nation to govern. More than three times the size of Texas, the country has a transport and communications infrastructure that is, as one analyst here describes it, "as if the 20th century had never happened."

The price of the country's principal export commodity, cotton, has collapsed in the international market. A list of Sudan's key exports points to its arrested development. The list includes camel meat, sesame seeds and gum arabic, the base of chewing gum.

Anyone who tries to sort out the country's problems inherits two twisted legacies. During the first half of this century, it was British colonial policy to keep Sudan's southern Africans separate from and ignorant of the northern Arabs. At independence, this divide-and-rule strategy produced two mutually suspicious nations inside the borders of one country. Civil war, 17 years of it, ensued.

Then came Jaafar Nimeri, a military dictator, who at first brought peace and booming development. But as his 16-year reign wound down, he and his U.S.-backed government became erratic, corrupt and brutal.

The regime began chopping off the hands of petty thieves and hanging political critics. The country piled up a $12 billion debt, interest on which (if paid) would consume 150 percent of export earnings. Southerners got mad and, in 1984, civil war again broke out.

Nimeri was overthrown in April 1985 in a bloodless coup supported by both the north and the south. A transitional military government held power for one year and set the stage for a peaceful, fair election. It produced the coalition government now headed by Mahdi.

Initial public reaction to his election was strongly favorable. Within three months, Mahdi held a peace summit with John Garang, leader of the southern rebels. The transitional government's suspension of the harshest, hand-amputating provisions of sharia was continued. A commission was appointed to study comprehensive reform of Islamic law. Even the weather blessed the new government. There were favorable rains and two record crops.

But as the months passed, Mahdi proved far more adept at talking about than acting on Sudan's problems. He traveled widely, and spoke publicly about mediating the war between Iran and Iraq.

"Sadiq has always wanted to pose as everything to everybody," says Turabi, a political enemy who also is the prime minister's brother-in-law and a life-long acquaintance. "He is part fundamentalist, part liberal, part socialist, part capitalist. He has tried to win the sympathy of Iran and the Arabs, of Libya and Egypt, of the United States and Russia. He wants to be both an imam and to appeal to secular western opinion.

"He dreams of being the mahdi for the world. The mahdi in Islam is supposed to fill the earth with justice. He is a guide who teaches people and leads them in every way. Sadiq is not deceitful. But he is not consistent."

Mahdi broke off peace negotiations with SPLA rebels after they shot down a commercial airliner. He called Garang a "terrorist" and suggested that the north could win a civil war with the south (a view shared by few knowledgeable Sudanese.)

Last week, Mahdi dismissed the war as "an afterthought" for his government that is "fought with a minimum kind of exertion."

A number of political analysts here say that Mahdi's vacillation derives from his fear of alienating his northern Islamic supporters. His coalition government is formed by the Umma Party and the Democratic Unionist Party. Both are political arms of powerful northern religious sects. On the fundamentalist right, Turabi's well-organized National Islamic Front threatens religious riots if "the teeth" are taken out of sharia.

"Sadiq has been emotionally blackmailed by his religious supporters," says Taisier Mohamed Ahmed Ali, a political scientist at the University of Khartoum. "He doesn't want to be seen as the one who takes God out of the law."

In person, Mahdi's articulate, self-confident manner does not dispel the widespread feeling in Khartoum that his government does not yet know what to do about sharia.

"By their very nature these are history-making events," Mahdi said. "How do you satisfy the mutually antagonistic points of view between those who want Islamization and those who want secularization? This cannot be eliminated or papered over . . .

"Yes, we have put into this matter a very substantial input of intellectual rigor. The preparation has gone deeper and more pervasive. We do hope it will culminate in a consensus."

Mahdi's position on the civil war, however, is more decisive. He argued forcefully that Sudan can grow and prosper despite the conflict.

"We are not being at all paralyzed {by the fighting}, neither our foreign policy, nor our educational policy, nor our economy," he said

And to fight that war in the cheapest possible way, Mahdi said that tribal militias "have been recruited to support {the} armed forces.

"The Sudan has an armed force of not more than 60,000. The Sudan has one million square miles, half the United States. There is no way the Sudan will be able to directly police itself," he said.

He said the tribal militias operate under the direct command of the Sudanese Army. United Nations and other relief officials who have traveled in central Sudan say Mahdi is wrong on this point. They say the Arab militias are free to fight whomever and whenever they want.

Mahdi acknowledges that in the past year there has been an eruption of "great proportions" of north-south, Arab-African tribal fighting. But he blames the violence entirely on southern rebels.

His tough statements about the war trouble western diplomats and economists who, in recent months, have been delighted with his new-found willingness to implement economic reform.

These sources say that a continued show of government resolve to shrink deficit spending and encourage exports will attract increased western aid. They also say that a generous rescheduling of Sudan's $12 billion debt is likely if the reforms continue.

Like many politicians and businessmen in Sudan, however, western donor governments do not accept Mahdi's argument that Sudan can both prosper and fight a civil war.

"You simply cannot have a successful, meaningful reform package in this country without some semblance of peace in the south," said a senior international economist who is involved in debt negotiations with Mahdi's government.

Bona Malwal, a southerner and editor of the English-language Sudan Times, is more blunt.

"So Mahdi gets new management for the railroads. So what? If there is always going to be a war, where are the trains going to go? Economic reform without resolution of the war is just stupid."