NAKFA, ETHIOPIA -- It's a moonlit Friday night at the front and, as usual, the troops in the trenches are blasting away.

It starts with Eritrean rebels taunting Ethiopian Army officers. The rebels turn on loudspeakers that denounce the "imperialist" regime in the capital, Addis Ababa. Amplified propaganda washes over government trenches, which lie about 100 yards from the trenches of the rebels.

After a few minutes, the Ethiopians have had enough. Soldiers are ordered to knock out the loudspeakers. Mortar shells whoosh and explode. The rebels answer with machine-gun fire. Amid the evening's routine mayhem, the loudspeakers play on, as does the world's longest-running civil war.

A Friday night fire fight in the trenches typifies the Eritrean civil war as viewed by a world weary of bad news from Ethiopia. When not forgotten or ignored, this war is dimly perceived as yet another ceaseless conflict in which Africans are flailing away at each other for incomprehensible reasons.

That image becomes only slightly less blurry when, as now, there is another international alert about starving Ethiopians. The threat of famine again calls to mind a conflict that headline writers have labeled "the endless war."

There is, however, more to the Eritrean separatist movement than interminable gunplay and periodic famine. Here in desolate rock-strewn mountains that for centuries were the chosen habitat only of lizards, the Eritrean People's Liberation Front (EPLF) has fashioned a revolution that is, oddly enough, beguiling.

On a continent of millionaire dictators, where broken promises of democracy dovetail with collapsing living standards and unpayable debts, Eritrea's revolutionaries hold out the possibility of an efficient, self-reliant African nation, run by Africans who have had 26 years to learn from the failures of independent Africa.

It is a society where educated elites work closely with peasants, where broken machinery is fixed, where outside aid money often is spent wisely, where women fight in trenches alongside men -- who are their political equals -- and where the EPLF's soft-spoken leader insists on maintaining a low profile.

Compared to much of Africa -- where educated elites often despise the peasantry, where broken machinery often stays broken, where outside aid money often is wasted, where women often work as pack animals for men and where many national leaders promote themselves as infallible gods -- Eritrea is a refreshing place.

Europeans of a socialist bent, and a number of African scholars, have been beguiled by the Eritrean cause. The parliaments of Norway and Denmark, the British Labor Party and the Greens in West Germany all have passed resolutions supporting the creation of an independent Eritrea run by the EPLF.

This year, 200,000 Norwegian schoolchildren, in a national day of learning about and working for Eritrea, raised $4 million and gave it to the rebels.

At the American African Studies convention last month in Denver, Basil Davidson, an eminent Africanist, argued in his keynote speech that the emergence of an independent Eritrea would be a hopeful development for Africa.

"The Eritreans have the advantage of coming last. They have seen the mistakes made by the others," says Roy Pateman, a professor of politics at Sydney University in Australia and the author of a forthcoming book on Eritrea. "Despite the war and the famine, this place gives real cause for hope. Things work." THE EPLF's DEPARTMENT of protocol gives guided tours of "liberated Eritrea" to prospective donors and to foreign journalists who may be read by potential contributors. It is a well-rehearsed and impressive show.

There is a sprawling, modern hospital with 33 doctors, facilities for open-heart surgery and a pharmaceutical factory that churns out 50,000 pills a year.

There is a video studio and a shoe factory, a print shop and a postal service, a school system for 25,000 children and a regional chain of all-night gas stations, a network of superbly engineered mountain roads and a 217-mile-long trench along which repeated offensives by the Soviet-backed Ethiopian Army have been repelled.

There are stolen Soviet-built T55 tanks, antiaircraft batteries and mobile garages. Skilled Eritrean mechanics are shown off performing complicated engine transplants on stolen Soviet trucks.

The tour also displays some of the more than 7,000 Ethiopian government soldiers whom the rebels hold as prisoners of war. It includes a battlefield near Nakfa that is littered with the skeletons of Ethiopian soldiers who were shot two years ago in a rebel victory. It shows off large flood-irrigation schemes where bulldozers have made earthen walls to capture the region's brief and violent rains. And it features the National Union of Eritrean Women, an organization that has helped secure the rights of women to own and inherit property.

"The regime in Addis Ababa says we are just a bunch of bandits in the hills," the guide from the department of protocol says again and again. "Does this look like the work of bandits?"

Impressive as the tour is, it cannot conceal the fact that, during daylight hours, EPLF rebels are forced to live like bandits.

The fancy hospital, the video studio, the chain of all-night gas stations -- all of the EPLF's elaborate infrastructure is underground, dug into the sides of mountains or elaborately camouflaged.

Only during darkness do the rebels dare take their stolen hardware out on their roads. Only at night do supply trucks pass back and forth from neighboring Sudan. The rebels have no aircraft. Unlike American-backed UNITA rebels in Angola, the EPLF has no superpower patron to supply it with ground-to-air missiles. The Ethiopians, with Soviet-provided MiGs, control the skies.

The rebels are daytime prisoners in their "liberated" territory. AS THE LONG civil war now stands, it appears that the EPLF cannot be beaten. In the past decade, eight Ethiopian government offensives, some mobilizing as many as 200,000 soldiers, have failed to push the rebels out of their trenches. In the past two years, the government has not even tried. Western sources say EPLF forces control about 85 percent of Eritrea.

Dawit Wolde Giorgis, a former Army major (now defected to the United States) who commanded this decade's largest governmental offensive in Eritrea, has said a military victory over the rebels is impossible.

The EPLF army is one of the largest, best equipped and most experienced fighting forces in sub-Saharan Africa, according to Pateman, the Australian academic.

Pateman, who was a visiting professor of politics last year at Princeton University, estimates that the EPLF has about 30,000 men and women in arms, about half of whom are well-trained and battle-experienced. He says they are outfitted with pilfered Soviet weaponry that they know how to repair. These forces, he says, are well-entrenched in mountains that are all but impassable, even to tanks.

Being unbeatable, however, does not mean that the EPLF has the military capacity to win its war and establish an independent Eritrea.

The Ethiopian government holds all the major towns in the region. According to U.S. government estimates, the Soviet Union has supplied the Ethiopian regime with $4 billion worth of arms and equipment, most of which has been deployed in Eritrea. Western diplomats say they doubt that the rebels can ever overcome their disadvantage in firepower and force the Addis Ababa regime to give up a region that is Ethiopia's only link to the sea.

The rebels, too, acknowledge that their capacity to grow food, store water and limit the damage of chronic drought is severely constrained by their vulnerability to air attack.

"We could do a lot more with our country if our farmers felt safe to work in their fields more than three or four hours a day," says Paulos Tesfa Giorgis, chairman of the Eritrean Relief Association, the relief arm of the rebel movement.

He says most farmers leave their fields at 8 a.m., when MiGs often are spotted over rebel-held Eritrea, and return to them after 4 p.m.

"Drought is not a new phenomenon in Eritrea, but insecurity has worsened its effects," says Paulos. "The people are not able to properly take care of their land or tend to their animals. So when drought comes it is devastating."

Because of severe drought and a near-total crop failure in Eritrea in 1987, Paulos estimates that his organization will have to provide a year's worth of food aid to about 750,000 peasants in rebel-held areas. With the support of such western donors as the United States and the European Community, he says he is confident the rebels can deliver the food and that the peasants will be fed. ERITREA'S REBELS probably can neither lose nor win. With the availability of western humanitarian aid, large numbers of peasant farmers in rebel-held areas probably will not starve to death. It is not much of a life, and it is lived at night.

The guide from the EPLF department of protocol insists, during the tour, that the rebels are fighting for a "just cause." They are willing, the guide says, to fight forever to reclaim their "nation" from "Ethiopian colonizers."

Like nearly every "nation" in Africa (with the notable exception of Ethiopia), Eritrea is a European invention.

Neither the political entity, nor even the word Eritrea (which comes from the Latin name for the bordering Red Sea) existed before 1890. That is when the Italians landed here to take part in Europe's scramble for Africa.

The Italians created a colony out of a patch of arid land that contained a contentious mishmash of Moslems and Christians, of lowland nomads and highland farmers, of more than a dozen ethnic groups and at least nine mutually unintelligible languages.

The lowlands along the Red Sea had never belonged to the Christian kingdom of Ethiopia. Much of the Eritrean highlands, however, had been an integral part of Ethiopia dating back 1,000 years.

The Italians stayed on in their colony for 51 years, constructing roads, railways and handsome cities. Before they were driven out by the British in World War II, the Italians also had constructed the idea of Eritrea and sold it to some of the inhabitants.

"Out of this heterogeneous collection of different peoples, the Italians had built almost a nation: to be an Eritrean and to be an Italian subject was a matter of pride," wrote historian Anthony Mockler in "Haile Selassie's War," a recent book about Ethiopia's struggles against Italy.

Besides nationalism, the Eritreans inherited from the Italians a relatively modern manufacturing base and learned many of the skills that could keep it functioning. In the mid-1960s, before civil war took its toll, Eritrea had more than one-third of the modern industrial capacity of Ethiopia. Many of the mechanics who work now in underground garages behind EPLF lines were trained by Italians in the Eritrean capital of Asmara.

Having been on the losing side, Eritrea emerged from World War II with its adolescent nationhood in peril. The victorious British governed it temporarily until a United Nations resolution in 1950 made it an "autonomous" region federated with Ethiopia.

The autonomy proved fictional. Ethiopia's emperor, Haile Selassie, systematically stripped Eritrea's elected assembly of power. After 12 years, the emperor gave up the pretense and annexed Eritrea as part of the empire.

A handful of Eritrean dissidents, however, would not allow their Italian-created nation to disappear. They gathered in the mountains and started the long fight for their "just cause." THE CURRENT LEADER of that cause is Isseyas Aferworki. He is tall, lanky and movie-star handsome. But the general secretary of the EPLF avoids the cult of personality preferred by many national and rebel leaders in Africa.

There are no pictures of Isseyas on display in EPLF land. He shows up for an interview in faded cotton slacks, a khaki shirt and black plastic sandals that are made in the EPLF's shoe factory. He refuses to answer all questions about his background, except to reveal his age, 41, the number of years he has been fighting, 21, and his birthplace, Asmara.

(Some reticence about his past is understandable. Haggai Erlich, an African specialist at the University of Tel Aviv, claims that Isseyas, in 1970 in a bar in downtown Asmara, machine-gunned two former judges who had sentenced some rebels to death. Also, according to Erlich, one of Isseyas's main rivals in the rebel movement was found poisoned to death in 1971.)

Instead of talking about himself, Isseyas speaks at length of an independent Eritrea under the EPLF that would encourage private enterprise while protecting the poor.

"The basis of our economic perspective is a mixed economy . . . . The road is open to everybody," he says. "We are not against people becoming rich, if they make their money in a fair way . . . . There is the possibility of {Eritrea} becoming a country producing consumer goods and a country of minor industries.

"When it comes to productivity, I think that collectivization is not an easy task to perform. That is clear from the experience of others {and} we would not be foolish enough to repeat the same mistakes again.

"We are for a multiparty system where all political ideas are to be represented. We are not dogmatic in our attitudes."

In a two-hour interview, Isseyas describes a mature separatist movement that has moved beyond the Marxist and Maoist ideology it espoused in the 1970s. He says, and several outside experts confirm, that the EPLF has resolved the bloody factional disputes that paralyzed the rebel movement in the 1970s.

It is a seductive picture that Isseyas paints, one that a growing number of Europeans are buying. But skeptics remain. They include the U.S. government, which, despite its antipathy for the Marxist regime in Addis Ababa, has never recognized the EPLF as a legitimate liberation movement.

Asked about the EPLF, U.S. diplomats in the region dismiss it as more radically Marxist than the Ethiopian government.

Paul Henze, a former National Security Council staff member and consultant to the Rand Corp., argues that the United States should stay at arms length from the EPLF, giving it only food.

"Eritrea is Lebanon squared. It has more languages, more ethnic diversity, more religious differences. The record of strife, especially among the separatists themselves, is longer and worse," Henze wrote recently in The Washington Quarterly. "The United States could never hope to control all the internal and external forces that could confound efforts to pacify and stabilize Eritrea."

The U.S. government, Henze says, should stick with its 40-year-old policy of urging Eritrean reintegration with Ethiopia while making provision for limited regional autonomy.

That policy, in fact, has recently been adopted by the Ethiopian government. In September, it made an offer of regional autonomy to Eritrea. The offer would give an elected congress in Eritrea the right to formulate its own laws, establish industries and collect taxes.

The EPLF rejected the offer, calling it a colonial ploy. Isseyas says that the rebels, after fighting for more than 26 years, will accept nothing less than independence.

"Now we can speak with confidence regarding our military capacity to continue this struggle," Isseyas says. "In the coming five years or three years, if you come here you will find the situation totally different. It is not the talk of an optimistic man." THE EPLF HAS a number of guest houses across Eritrea where it puts up, in comfort, western visitors who might give it money, technical advice or publicity.

During a spaghetti lunch at one of the guest houses, Reidun Heiene, 26, a veterinary student from Oslo and a volunteer in Norway's veterinary campaign for Eritrea, spoke admiringly of all that she had seen in the "liberated zone." She mentioned women's liberation, land reform, ethnic tolerance and the equal distribution of wealth.

"There is the possibility," she said, "that this could be really something nice."