ADDIS ABABA, ETHIOPIA, FEB. 18 -- Talks open Tuesday in Washington between Ethiopia's Marxist government and Eritrean secessionist rebels, with the aim of negotiating an end to almost 33 years of bloody civil conflict.

The meeting, product of long months of U.S. efforts to bring the opponents face to face, has fanned an ember of hope for peace.

"What few resources Ethiopia has got left are being spent on the war. They're out of hard currency. They're out of fuel stocks. . . . The cities are overflowing," said a Western diplomat.

President Mengistu Haile Mariam would seem to have little alternative but to press for peace. And a U.S. diplomat acknowledged that the government has proved more cooperative than the Eritrean People's Liberation Front in setting up the talks. Eritrea is Ethiopia's northernmost province, bordering the Red Sea.

But the diplomat said he was worried about the view expressed by some Ethiopian officials that a military victory might be possible now that Iraq, one of the Liberation Front's supporters, appears headed for defeat in the Persian Gulf War. "That's a dangerous attitude to have going into peace talks," said the diplomat, requesting anonymity.

For the government's part, Soviet arms, which over the years amounted to billions of dollars worth, are down to a trickle. Foreign currency reserves have shrunk to the lowest point in two decades. The price of coffee, the chief export, continues to slide, while 50 percent of export revenues goes to debt repayment.

Ethiopian officials say more than half of the government's budget is for the war. Unofficial estimates put the military drain as high as 80 percent.

Whatever the figure, there is little cash to spread around an urban population restive over soaring food prices, low wages and mile-long gas lines. If the fuel crisis continues, transport of food from the countryside to the cities may also break down.

Adding to already high tensions are persistent reports from well-informed Ethiopians that a different rebel group, supposedly encouraged by the recent fall of presidents Mohammed Siad Barre in Somalia and Hissene Habre in Chad, is planning to launch a new offensive in Tigre Province as part of its own fight against the government.

Some here fear the problems could drive Ethiopians into the streets. "It is as if someone has gone around town sprinkling gasoline. At some point, someone will inadvertently strike a match and the whole place will go up," said Mesfin Wolde-Mariam, a geography professor at Addis Ababa University and one of Ethiopia's most outspoken and respected commentators.

"No one knows just when that spark will come . . . but if it explodes, there is no doubt it will be worse than Mogadishu {Somalia} because the Ethiopian people have their hearts full of vengeance," he said.

Despite the extreme pressures on the Mengistu regime, many foreign and Ethiopian observers are skeptical that the government has the political will to accept the compromises needed to end the war. Nor did a recent declaration from the leadership of the Eritrean People's Liberation Front, vowing to take their military struggle to "total victory," inspire much hope of flexibility from that side.

However, Ethiopian officials at all levels say Mengistu has concluded that a military answer to the Eritrean rebellion is out of reach. "We are genuinely determined to see a durable solution through a negotiated peace settlement," said Kaffa Kebede, a top Communist Party official reported to be close to Mengistu. "I think that in practical terms, we've done more than enough to demonstrate that commitment."

Kebede said he and other officials have been studying the concept of federalism -- including the U.S. Constitution -- which is widely regarded by outside observers as the most likely solution to the Eritrean problem.