Before he paid someone to smuggle him into the United States, Juan, a farmer's son, was tending six acres of beans, rice and corn in the village of Ojos de Agua in war-ravaged El Salvador.

"The corn was just ready to harvest when they killed him," said Juan, 27, recalling the day in July when he says Salvadoran soldiers came to the farm near Chirilagua in southern San Miguel province and gunned down his 65-year-old father, a suspected guerrilla sympathizer. Soon Juan, too, was receiving death threats.

Juan slipped across the border and flew to Washington about two months ago, his trip paid for by relatives. His cousin Joaquin, 16, fearful of the draft, followed him a few weeks later. These days, they share a $150-a-month, two-room apartment in the District with Juan's sister, her husband and an aunt. Skittish about using last names, they curse the cold, struggle to find menial jobs that most Americans would shun and live in constant fear of being deported.

Still, they say, speaking through an interpreter, it's better than living in a war zone.

This month the Senate is expected to consider the plight of Juan, Joaquin and an estimated 500,000 other Salvadorans who are living in the United States illegally. They have become the focal point of proposed legislation that would grant Salvadorans and Nicaraguans a two-year deportation reprieve while the General Accounting Office and Congress investigate conditions in the two civil war-torn Central American countries.

The measure is being tracked closely in the Washington area, now home to nearly 120,000 Salvadorans, the second-largest concentration in the country after Los Angeles. The District, where the Salvadoran population has swelled from an estimated 30,000 to 85,000 since 1980, is the only city in the country where Salvadorans make up a majority of the Hispanic community, according to the D.C. Office of Latino Affairs.

Proponents of the bill, introduced by Sen. Dennis DeConcini (D-Ariz.) and cosponsored by more than 30 senators, say it is a humanitarian effort to protect Salvadorans and Nicaraguans from being sent back, possibly to their deaths. And without the fear of deportation, they say, both groups would no longer have to put up with abuse from employers, landlords and others who often exploit their illegal situation.

Salvadorans are especially in need of that protection, according to the bill's supporters, because most of them entered the country after Jan. 1, 1982, the cutoff date for eligibility in the U.S. government's amnesty program for illegal aliens. Also, in contrast to Nicaraguans who flee a government the United States doesn't support, few Salvadorans have been granted political asylum here.

Opponents of the bill, led by Sen. Alan K. Simpson (R-Wyo.), a key architect of the 1986 Immigration Reform and Control Act, argue that conditions have improved in El Salvador and that the dangers of returning there have been exaggerated. Even a temporary deportation ban, they say, would encourage more Central Americans to enter the country illegally and upend an immigration policy that calls for handling amnesty and political asylum claims case by case.

The issue has become a test of wills between DeConcini, a strong ally of the Sanctuary movement, and Simpson, who believes that most of those undocumented immigrants left their countries in search of better lives -- rather than fleeing death or persecution -- and are not entitled to blanket status as political refugees.

"When people think they'll be thrown out, they'll seek asylum," said Simpson, who calls it an "unbelievable absurdity" to think that returning Salvadorans will be slain. "Their claims are porous and fictitious in many ways."

DeConcini, for his part, argues that the United States, which spends millions a year on military and economic aid to the Salvadoran government, has "a moral obligation" to help those displaced by the war. "It really troubles me that the administration has got its back up on this thing."

The impending showdown pits DeConcini and a coalition of the American Civil Liberties Union, church, labor and Central American refugee rights groups against the Reagan administration, Simpson and the conservative, well-financed Federation for American Immigration Reform.

A House version of the legislation, sponsored by Rep. Joseph Moakley (D-Mass.), passed in summer by a wide margin. But the Senate vote is expected to be much closer, and DeConcini said recently that although he might be able to muster a bare majority for passage, he does not have enough votes to stop a possible filibuster or to override a presidential veto.

The bill is in trouble even though Jose Napoleon Duarte, El Salvador's president, has asked President Reagan to give Salvadorans preferential treatment under the new immigration law. Duarte, mindful that Salvadorans here send at least $350 million home to their relatives, says his country's precarious economy could not withstand a flood of returning refugees.

El Salvador is Central America's most densely populated nation, where 5.2 million people live in an area roughly the size of Massachusetts. Most Salvadorans who left their homeland are poor, illiterate peasants who fled the eastern and northern provinces after civil war broke out there eight years ago.

Once here, they work as dishwashers, domestics and custodians, if they are lucky. While some have prospered, many escaping the war zone exhibit mental health problems similar to the post-traumatic stress disorder suffered by Vietnam combat veterans, according to recent studies. Almost all have found life in the United States difficult.

"I thought everything would be nice and smooth and beautiful," said Carlos Iraheta, 21, who works 10 hours a day, six days a week to make $320 a week as a house painter. "But for myself, it's not better."

Iraheta, who drove his family's farm truck to market, was drafted by the Salvadoran army in 1982 and later wounded by a grenade during a guerrilla attack. His mother sent him north to relatives, and his sister here paid a $2,500 bond after he was captured at the California border.

Now, as he awaits the outcome of an application for asylum, Iraheta relies on legal assistance from Horizons, a service group for Central Americans, and dreams of going home. He stays, he said, because he wants to repay his sister and earn some money for himself if he is sent back.

Many others, however, are not eager to return.

"The money is okay and the cold won't kill me -- not like the bullets there," said Juan, who makes $20 a week helping his brother-in-law clean a restaurant at night.

The situation for Salvadorans here deteriorated sharply last year when the sweeping U.S. immigration law began imposing sanctions on employers who hired undocumented workers. This made it tougher for illegal aliens to make a living and left them more vulnerable to detection by the Immigration and Naturalization Service.

INS spokesman Duke Austen said 906 applications for asylum were granted to Salvadorans from 1982 to 1987, while 21,250 applications were denied. Nicaraguans, he said, were granted asylum in 5,937 cases from 1980 to 1987 and denied asylum in 17,605 cases.

But he cautioned that his agency is only one level of the process, noting that a recent check showed 70 percent of all those denied asylum were still here two years later. For example, he said, nearly 114,000 Salvadorans have been apprehended by INS agents from 1980 to 1986, while only 48,209 have been deported.

Refugee assistance groups say 4 percent of Salvadoran asylum applications are approved nationwide each year, compared with 60 percent for Iranians, 35 percent for Poles and 25 percent for Nicaraguans, a figure they say has jumped to 88 percent in the last six months. The groups say they often lose track of illegal aliens once they receive their "bag and baggage letter" -- a notice ordering them to report to their local INS office for deportation.

"The immigration law is driving Salvadorans further underground and creating an underclass in this country that is not willing to go away," said Sylvia Rosales, executive director of the Central American Refugee Center here.

The Moakley-DeConcini bill, she said, would provide a temporary solution, allow Salvadorans to get work permits and "enable some of them to go and ask for their rights whenever there are abuses."

Until the new immigration law, said Arlene Gillespi, who heads the D.C. Office of Latino Affairs, "large numbers of undocumented aliens were providing for themselves and their families. Now, those who can't qualify for amnesty are left out there hanging on their own."

But Roger Conner, director of the Federation for American Immigration Reform, said the United States must have an immigration policy that looks at this nation's long-term interests, including the impact on the economy and natural resources. Citing the example of Polish refugees, he warns that Salvadorans who are given temporary residency will likely receive permanent residency later.

"The trouble is there are a billion people living in countries where they are an ethnic or racial minority in a country that practices torture," Conner said. "El Salvador is vastly safer than Lebanon."

The bill, Conner said, would continue the practice of letting politicians make refugee policy -- and give rights to people who entered the country illegally.

The ACLU's Wade Henderson, however, says Connor's group is "fearful of diversity. They think every new person gulps down a bucket of their air."

While the debate rages on, Salvadorans such as Marina Blanco, 29, a mother of five, wait out the war.

Blanco said she fled El Salvador in 1983 after soldiers -- looking for her husband, a suspected guerrilla sympathizer -- kidnaped her and her children, raped her and threatened them. She used to make and sell tortillas in her country; now she counsels other immigrants for the Salvadoran Refugee Committee, supports her family on $100 a week and lives with them in a 1 1/2-room apartment in Adams-Morgan.

"Most Salvadorans here don't have that," Blanco said. "The choice is to stay and halfway survive or go back home and be in the dragon's fire."