SAN SALVADOR, NOV. 18 -- President Alfredo Cristiani, depicting himself as isolated at home, warned that the recent 50 percent cut in U.S. military aid to El Salvador could embolden right-wing extremists.

In an interview, the soft-spoken president described himself as a leader who had confounded critics by pursuing a moderate policy. However, he cautioned, his policy of moderation is now endangered by challenges from El Salvador's traditionally violent extreme right.

Cristiani said that instead of taking a hard line, he started negotiations, "was very open" and "worked for military reform. Now if that policy doesn't work," he said, if he is "isolated by the entire world," then he will start losing his policy arguments

The president suggested that the $42.5 million cut in U.S. military assistance, which he said would begin to pinch in the second half of 1991, could deepen his isolation domestically. "I haven't seen any change whatsoever yet," he said. "But this {aid cut} could be a change that generates hopes for the extremes."

Despite his cautionary tone, Cristiani said he remained optimistic about the chances of a negotiated settlement with the leftist Farabundo Marti National Liberation Front (FMLN) to end El Salvador's 11-year-old civil war.

"We have never been so close to the possibility of finding a solution to the war," he said. There is "a lot better" than a 50-50 chance for a settlement next year, he added.

The president's remarks on his political standing came amid unconfirmed reports that extremists in the president's Arena Party and the armed forces have readied plans to kill thousands of civilian supporters of the FMLN.

Both the Arena Party and the army are split between moderates, who favor a negotiated solution to the war, and hard-line factions associated with violence of the early 1980s in which tens of thousands of civilians were killed by death squads.

There have been recurring rumors that Cristiani has pressed for an aggressive investigation into the killing of six Jesuit priests a year ago and that he has been warned to back off from the case.

According to an informed source, who spoke on condition of anonymity, three letters warned Cristiani against pursuing the Jesuit case, in which an army colonel and seven other soldiers are charged, and another investigation involving a retired colonel who was director of immigration when Cristiani fired him last summer on suspicion of corruption. The letters warned Cristiani that no one could protect him, the source said.

In the interview, Cristiani denied having received any threatening letters. He complained that critics in the U.S. Congress were "jumping to conclusions" on the case by charging the Salvadoran armed forces with a cover-up in the investigation.

While acknowledging that Salvadoran military officers have long engaged with impunity in human rights abuses, including murder, Christiani said: "Justice is not synonymous with speed or pleasing someone's hypothesis. It's showing beyond reasonable doubt that there is guilt."

Many observers, including Salvadorans, Americans and foreign diplomats, have suggested it is difficult to believe that Col. Guillermo Benavides, the top-ranking officer charged in the Jesuits' deaths, could have ordered the killings on his own. Given the collegial nature of the Salvadoran armed forces, they say, such a decision would almost certainly have been the product of a consensus among senior officers.

But Cristiani rejected such a conclusion.

"They have no proof to offer," he said. "It's only a supposition -- maybe a logical one. It might end up being true, but it also might end up being wrong."

Cristiani said that of 35 top officers who the FMLN last year said should be removed, just 12 remain on active duty. Those remain in key positions. "It's incorrect to say that nothing's been done," he said.