ALGIERS, JUNE 13 (WEDNESDAY) -- Radical Islamic fundamentalists were sweeping to victory in Algeria's first free elections since winning independence from France in 1962, Interior Minister Mohamed Salah Mohammedi said early today.

Speaking five hours after polls closed in municipal and regional elections, Mohammedi said "it appears from the partial counting of the vote that there is a preponderance of the Islamic Salvation {Front} ahead of the National Liberation Front."

Mohammedi's remarks were interpreted here as official confirmation of the repudiation of the party that has ruled Algeria for 28 years, an upset with major implictions for the entire western Mediterranean. Professional politicians and analysts had expected the National Liberation Front to remain the country's largest party because of solid rural support and a predicted backlash against fundamentalism among older voters.

Though no official vote counts were expected before this afternoon, Islamic Front leader Abbassi Madani said his party "is ahead in an absolute majority of the country's municipalities and provinces."

Diplomats predicted the ruling party's collapse would force early national legislative elections and place in jeopardy President Chadli Bendjedid's own future.

"The FLN, for all intents and purposes, is finished," said Arun Kapil, an American political scientist conducting research here, "and Algeria is entering an era of open-ended crisis.

"Despite the total backing of the Algerian state and all the financial resources at their disposal, the NLF has shown its total inability to mobilize the country behind it," Kapil said.

Analysts said the vote was less a massive show of support for the fundamentalists than a reaction to the ruling party's long record of authoritarian rule and economic mismanagement.

But Khalida Messaoudi, a prominent feminist leader, said: "Algeria has tipped over into fundamentalism. Will women be able to go out tomorrow?"

The fundamentalists' success also was expected to send shock waves through North Africa and Europe, which had awaited the outcome with trepidation.

Tunisia has refused repeated demands to authorize a fundamentalist party after Moslem militants allowed to run as independents captured 18 percent of the vote in legislative elections last year.

In Morocco, King Hassan II, who is both religious and temporal ruler, has arrested fundamentalist leaders and confided to recent visitors his concern about increasing signs of their political activity in his kingdom.

The specter of militant Islamic politics in this country of 24 million citizens also has heightened Western Europe's fears of being flooded by illegal immigrants from North Africa.

Under domestic political pressures, Italy, Spain and especially France, with 4 million Moslem inhabitants, have all adopted restrictive immigration measures.

Michel Vauzelle, chairman of the French parliament's Foreign Affairs Commission, recently warned that "fundamentalism's threat can create a zone of instability, insecurity and even hostility at our southern borders."

Also seriously called into question, according to a Western specialist on the Algerian economy, were Algerian hopes of attracting massive Western private investment to help solve the country's persistent economic slump.

The Algerian government is concerned that a strong fundamentalist showing will scare off Western banks and private investors, whose recently authorized presence broke a long taboo in Algeria's centralized socialist economy.

Their new role here is considered an essential part of economic reforms intended to revitalize the country's massive, inefficient and feather-bedded public sector.

The Islamic Front has dominated Algeria's political debate since the group was legalized last August, capitalizing on resentment against the ruling party to push demands for an Islamic republic regulated by the sharia, or Koranic law.

Madani's well-organized and lavishly financed campaign helped polarize Algerian politics to the detriment of nearly a dozen smaller parties unable to form a convincing alternative for many voters opposed to both the larger rivals.

Fundamentalism is strongest among the young urban poor in Algeria's teeming cities. They are the hardest hit by an enduring economic slump in this nation once relatively prosperous from its production of oil and natural gas.

The economy is burdened by falling petroleum prices, heavy repayments on a $24 billion foreign debt, an increasing population, 30 percent annual inflation, 20 percent unemployment, corruption and economic mismanagement.

The campaign went into high gear in late April with a silent march to the presidential palace by tens of thousands of fundamentalists that caught the NLF off guard.

That march prompted the fundamentalists' frightened rivals to demonstrate in turn. Over the weeks, war veterans, women, professional associations, the Berber minority and the ruling party itself turned out by the tens of thousands.