PARIS, SEPT. 27 -- The revolutionary leader and first president of Algeria, Ahmed Ben Bella, returned home today after a decade in exile and exhorted more than 100,000 cheering supporters to back Iraq in its confrontation with the United States.

As Ben Bella and his entourage sailed into the port of Algiers aboard a car ferry after an overnight voyage from Barcelona, the huge throng cheered and waved posters of Ben Bella and Iraqi President Saddam Hussein to display their admiration for two leaders who have challenged the presence of Western powers in the Arab world.

"Iraq needs support," Ben Bella, 73, said in an emotional speech outside the National Assembly shortly after his arrival. "Go by the hundreds of thousands to the Iraqi Embassy and don't leave until they sign you up as volunteers."

Ben Bella, who was warmly embraced by Saddam Hussein during a recent visit to Baghdad, denounced the multinational military forces arrayed against Iraq and urged the crowd to protest at the U.S. Embassy. He warned that the Arab world would retaliate against any Western-led assault on Baghdad.

"If they strike Saddam, that means they strike at us," he said. "We will hit back at everybody."

The dramatic homecoming for the father of Algerian independence appeared to launch a remarkable political comeback that many expect will lead him to recapture the presidency he lost in a military coup in 1965. Before his arrival, Ben Bella told supporters that his first goal was to build a coalition that could bring down the ruling National Liberation Front. Legislative elections are scheduled for next spring, but today Ben Bella urged the government to resign immediately.

The charismatic leader who helped ignite the war that toppled French colonialism is returning at a critical juncture. A Socialist government once known for its repression is experimenting with democracy and is facing a powerful challenge from Islamic fundamentalists.

The popularity of the religious forces was reflected in their strong showing shown in local and regional elections last June that were the first exercise in multiparty voting in Algeria since 1962. The fundamentalists were widely expected to win the national elections next spring, but Ben Bella's return is now likely to bolster the prospects of an alliance of secular opposition parties led by his Movement for Democracy in Algeria.

Ben Bella has not announced a decision to run for the presidency, but he is highly popular and widely expected to win if he chooses to seek the post when President Chadli Bendjedid's term expires in 1993.

Ben Bella became president in 1962 after serving as one of the key architects of Algeria's eight-year colonial war against France. He was toppled from the presidency in 1965 in a military coup, declared a non-person and imprisoned until 1978. After Bendjedid took power, he freed Ben Bella and allowed him to leave the country.

Algeria has been faced with wrenching social polarization caused by economic mismanagement and the surging appeal of Islamic fundamentalism among disaffected youth.