It was a gloriously warm autumn day when 300 people gathered at the state capitol here on Native American Day last week to celebrate the late Gov. George S. Mickelson's dream of reconciliation between Indians and whites, who in a sense have never really stopped fighting in South Dakota since Gen. George A. Custer made his last stand at Little Bighorn.

There was a children's choir, bagpipes, flutists and impassioned speeches condemning the kind of mistrust and racism long abhorred by Mickelson, who in 1990 angered many white people in the state by making Native American Day a legal holiday.

Conspicuously absent from the ceremony was its invited Grand Marshal, Gov. William J. Janklow (R), called "Wild Bill Janklow, the Indian Fighter" by many Indians. Janklow was in Sioux Falls, fulfilling what he said were prior commitments.

Also missing was a group of Indians who since March have occupied a small island in the middle of the Missouri River--within sight of the Capitol--to protest what they call a "land grab" of more than 200 miles of river shoreline, engineered by Janklow and Senate Minority Leader Thomas A. Daschle (D-S.D.). The protesters say it violates the 1851 and 1868 Fort Laramie treaties.

Although the treaties gave the west bank of the river--plus the western half of South Dakota and large parts of Nebraska, Wyoming, Montana and North Dakota--to the Sioux Nation, subsequent congressional acts and U.S. Supreme Court rulings have effectively abrogated the pacts. In August, President Clinton signed a bill transferring the river property from the U.S. Army Corps of Engineers--which acquired it in the 1940s for federal flood control projects--to the state.

Indians across the state are furious at Daschle for first quietly inserting the land transfer into the voluminous 1998 omnibus spending bill and then, after the House voted to repeal the deal, submitting a renamed version as part of a water development bill that ultimately passed.

The Corps of Engineers had not been able to adequately maintain boat ramps and other recreational facilities along the west bank of the river, Janklow said. Transferring the land to the state, in addition to the Cheyenne River and Lower Brule tribes' agreement to the deal, will allow the state to develop more recreational facilities while protecting portions of the shoreline from erosion and development, he said.

"The river is our number one resource, and this is a way to protect it," Janklow said.

So as they have been for generations, the Sioux tribes and the state are once again in conflict over who controls the land they share, an ongoing dispute usually centered on the mineral-rich Black Hills, 200 miles west of here, which also were taken from the Indians.

But the tensions go far deeper than land disputes. They reflect a vast cultural divide and a gulf of suspicion and mistrust between Indians and whites in a state that historically was one of the bloodiest battlegrounds between the races during the great westward expansion.

The smoldering anger of the young "fire-keepers" who are tending a sacramental fire at the protest encampment on La Framboise Island here--a fire they vow will not be extinguished until the Sioux get back the Missouri River shoreline--seems at times to be directed less at the land transfer than at Janklow and the kind of anti-Indian sentiment they say he represents.

"I see him as the modern-day Custer, a racist through and through," said Richard Charigreaux, an Oglala Sioux from the Pine Ridge Reservation, as he sat with other fire-keepers in front of a tepee in which the spiritual fire burned. "In our religion, we were taught to pray for our enemies so they can see, but I don't think he'll ever see."

The camp protesters--who vary daily from about a dozen to 200--recalled Janklow's role as a zealous prosecutor of members of the militant American Indian Movement (AIM) during the bloody civil wars of the early 1970s on the Pine Ridge Reservation, including defendants in the 1974 Custer County Court House riots, in which Indians firebombed buildings after the arrest of an Indian woman whose son had been killed by a white man.

Janklow said he became a villain to militant Indians after he prosecuted prominent AIM leader Dennis Banks and others in the riot case. "I made the point that we had to stop this in South Dakota, and I did," he said. "They don't scare me."

But some of the Sioux at the camp went further, repeating an unsubstantiated allegation a tribal judge made on the Rosebud Sioux Reservation in 1974, when Janklow was running for state attorney general: that in 1967, Janklow raped a 15-year-old Indian girl when he worked as a state Legal Services attorney on the reservation.

Three separate federal investigations cleared him. And in a two-hour interview in Sioux Falls, Janklow vehemently denied the accusation, calling it a "completely bogus charge" fabricated by AIM supporters in the closing weeks of a bitter political campaign.

Nonetheless, militant Indians in the protest camp here and on reservations elsewhere in the state still view Janklow as a symbol of what they say is a deep undercurrent of racism against Indians, which they suspect is the motive in a series of recent unsolved killings of Native Americans on and off reservations.

On the Pine Ridge Reservation, tensions remain high four months after two Sioux men were found slain in a culvert near the Nebraska border. Many Sioux are convinced that white sheriff's deputies killed the men in White Clay, Neb., and dumped their bodies across the state line in Pine Ridge.

In Mobridge, S.D., Indians have protested authorities' handling of last summer's death of a 22-year-old Indian, Robert Many Horses, who was found stuffed face-down in a garbage can. After an autopsy found that Many Horses died of alcohol poisoning, charges against four white teenagers implicated in his death were dropped. They contrast that action with those in the case of three Indians accused in August of assaulting a white man in Martin, S.D. They were denied bail while awaiting trial in federal court.

And in Rapid City, Indians have marched to protest what they say is a lack of police attention to the deaths of six Indian men, most of them homeless, found drowned in a river since May 1998.

"We're used to this kind of racism," said Legrand Wells, a Standing Rock Sioux who has been in the protest camp here for three weeks. "Whites drive by here going, 'Whoop, whoop!' like Indians" and yelling racial slurs. One night, whites fired a shot toward the camp, the fire-keepers said.

The governor said claims of racial tensions in the state were exaggerated and noted that the racism that does exist cuts both ways. He said there are "some whites who don't like Indians, but also some Indians don't like whites.

"As much as these folks hate me, I never anticipated" the uproar over the land arrangement, Janklow said. "I thought this would be the hottest deal they could ever get."

Citing Supreme Court decisions holding that the power to make a treaty is the power to break a treaty, Janklow said, "There's no question the Indians got screwed" when the Fort Laramie treaties were broken and the Sioux Nation's vast lands were reduced to a few scattered and desolate reservations.

"If I was an Indian, I could understand the shaft, because this land was stolen in spite of the treaty. But we didn't do it, the federal government did it, and now it's leaving us to try to deal with it," the governor added.

Charmaine White-Face, spokesman for the Black Hills Nation Treaty Council, said the Sioux will fight to repeal the transfer because "federal law can't abrogate treaties. . . . We didn't make an agreement with Bill Janklow, we made an agreement with the U.S. government."