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Argentine generals in a dream world?

There is deepening concern among diplomats here that the Argentine military is living in a dream world of its own making.

''The generals simply do not understand the genie -- and a bad genie at that -- that they let out of the bottle in their taking of the Malvinas (Falklands) Islands,'' comments one of Argentina's most credible writers.

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His view is widely held. There is also a strong feeling that President Leopoldo Fortunato Galtieri and his fellow officers do not realize that they are increasingly isolating themselves -- not only from the United States and Western Europe, but also from a sympathetic and worried Latin America. The complaint has also been heard more and more frequently that the generals are not even listening to other Argentines.

''We are on a dead-end street,'' is the way a high government official, a civilian, expressed it this week in comments in the morning newspaper La Nacion.

It may be dawning on the generals, however, that they have painted themselves into a corner with their seizure of the Falklands. But this awareness is limited at best. US Secretary of State Alexander M. Haig Jr. tried to tell them as much during his two recent visits to Buenos Aires. Other US officials here have given them the same message. ''But for the most part they are not listening,'' a civilian politician close to the government says.

The generals lurched further down the dead-end street April 21 with a sharply worded communique stating in unbending terms that Argentine sovereignty over the islands is ''final and unrenounceable.'' And it charged Britain with ''aggressive conduct'' in dispatching its fleet to the South Atlantic.

The continuing Haig mediation, which switched this week to Washington, is aimed at preventing a clash between the British and Argentines. British Foreign Secretary Francis Pym arrives in Washington April 22 for consultations. Argentina has said Foreign Minister Nicanor Costa Mendez may meet Mr. Haig after addressing the Organization of American States in Washington April 26.

But the US is finding it increasingly hard to deal with the Argentine military. While making it clear to Argentina that it wants to find a solution, Washington has also told the Argentines, as have a growing number of Latin American governments, that unilateral seizure of the Falklands April 2 was no less aggressive an action than Britain's response in sending an armada. Washington has also indicated that it understands, and at least partially supports, the British.

A number of Latin American governments, acknowledging their support of Argentina's right to the Falklands, have privately told the Argentines they find it difficult to support the military takeover.

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One government is reported to have told an Argentine diplomat that Argentina is becoming the pariah of the Western Hemisphere and that it could wind up isolated.A survey of Latin American governments by the Reuters news agency shows wide support for the Argentine claim to the Falklands, but that a majority of these nations do not condone the use of force in gaining control of the islands. Brazil and Mexico, the strongest nations in the region, said they would be reluctant to back Argentina militarily if war breaks out.

These warnings seem not to weigh much on military thinking here. Against Mr. Haig's counsel, Argentina appealed to the Organization of American States to invoke the Rio de Janeiro treaty of mutual assistance, charging a British attack was imminent.

Latin America supported the Argentine call for talks of the issue early next week, although the vote was not strongly pro-Argentine.

Many Latin Americans are angry at the effort to invoke the treaty now. They think the Argentine case is weak. No Latin American nation wants war in the South Atlantic but most tend to think Argentina may be more responsible than the British.

Moreover, Latin America is concerned that Argentina acted while Mr. Haig's mediation efforts continued.Washington is also angry. Mr. Haig urged Argentina not to invoke the treaty during the mediation.

The generals here ''were told not only by General Haig, but by fellow Argentines,'' say a longtime observer, ''that one exhausts one avenue before trying another. They did not listen.''

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