The United States suspended its $2.8 million military aid program to Guatemala yesterday because of what it said was that Central American country's failure to curb human rights abuses, including the murder of a U.S. hotel keeper last spring.

"We have concluded that it would not be appropriate to continue a normal military assistance relationship with Guatemala at this time," State Department spokesman Richard Boucher said in announcing the suspension.

The action capped months of mounting strain in relations between Washington and President Vinicio Cerezo's government over its alleged failure to investigate and prosecute rights violations that are widely believed to have been committed by the Guatemalan armed forces.

Last month, Americas Watch, a private, U.S. human rights watchdog group, charged that Guatemala is suffering from a major campaign of military and rightist-inspired assassinations aimed at its rural Indian populations, political leaders, trade unionists, students and journalists. In a Dec. 2 incident , 14 persons were killed and 19 others wounded, reportedly by soldiers, in the province of Atitlan.

State Department sources said, however, that the aid suspension was prompted primarily by the beating and decapitation murder June 8 of Michael V. DeVine, 49, a native of Belleville, Ill., who had operated a hotel and restaurant near Peten in northern Guatemala.

Six Guatemalans -- five Army soldiers and a civilian -- have been charged in the case, based on evidence unearthed by a private investigator hired by DeVine's wife. There has been widespread suspicion here that the Cerezo government, under pressure from the military, has been reluctant to pursue prosecution and dispose of the case before Cerezo's term ends on Jan. 14.

An official statement from the Guatemalan government called the military aid decision a "drastic act against Guatemala because of the assassination of one North American."

The communique recognized that "a group of people not connected with the government carry out human rights abuses" and said there are problems with the judicial system. But it said the decision was inconsistent with praise from the State Department for the country's electoral and democratization processes.

The U.S. action marks a bitter ending for a relationship that inspired high hopes here when Cerezo, a center-left Christian Democrat, took office at the beginning of 1986 as Guatemala's first elected, civilian president following 16 years of military rule. His election was hailed by U.S. liberals and rights activists as a hopeful sign of emerging democracy in a region torn by military dictatorship and civil war.

Guatemala, a Tennessee-sized country of almost 9 million people, is scheduled to receive almost $50 million in economic aid, which will not be affected by the suspension.

Military assistance had been suspended throughout most of the 1970s because of past abuses by the armed forces. When it was renewed by the Reagan administration, all such assistance, primarily in the form of credits to buy equipment, was limited to non-lethal purposes.

While U.S. officials credit Cerezo with good intentions, they said privately that he has been too timid in challenging the power and autonomy of the armed forces and its rightist political allies. No Guatemalan military officer has been convicted of a human rights violation.

U.S. officials said they would reserve a decision on possible further action until the situation regarding Cerezo's successor becomes clear. The results of elections last month were inconclusive and a runoff has been scheduled for Jan. 6, with the winner to take office eight days later.

Special correspondent Lucy Hood in Guatemala contributed to this report.