AUTOCRATIC SHIFT CLOUDS ARMENIA'S ADVANCES : STIFLED FREEDOMS DRIVING WEDGE BETWEEN ONCE-UNIFIED CITIZENRY.

Byline: Michael Specter The New York Times

This should have been a glorious winter for the troubled people of Armenia. For the first time in years peace has taken root. It is no longer necessary for anyone to burn furniture or park benches to keep warm. The longest lines at stores are of shoppers clamoring to buy microwave ovens to use in kitchens that last year had no electricity and little food.

Suddenly there are cafes, restaurants, banks and a currency worth holding for more than an hour. Inflation is plummeting and real incomes, while still low, are slowly on the rise. Boutiques sell French shoes and Italian suits. After years of decline, the birth rate - a raw indicator of hope and determination - has started to edge up.

But there are no celebrations this season. Once regarded as an oasis of civility and democracy among former Soviet republics, Armenia has drifted toward dictatorship.

Presidential elections this fall were found to be so deeply flawed that the United States, which provides more foreign aid to Armenia per person than to any country except Israel, declined to offer routine congratulations to the winner, Levon Ter-Petrossian.

It has been a year of diminishing press freedom and rising human-rights violations. Most of all, it has been a year in which Ter-Petrossian, once revered as the man who brought democracy to Armenia, appears to have completed a journey from liberal intellectual to stony autocrat.

Ter-Petrossian rarely speaks in public. He has no tolerance for opposition. His meetings are few and many of his decisions are made in secret. Despite the large and influential Armenian diaspora in the United States, he has not given an interview to a Western reporter for at least two years because, Gerard Libaridian, his senior adviser, said, ``They only use a short quote and they take him out of context.''

(Ter-Petrossian, a philologist who was jailed by the Soviets as a dissident and speaks 10 languages with relative fluency, initially agreed to be interviewed for this article. He then said through an aide that he was too busy.)

``We had a marvelous dream of freedom a few years ago,'' said Berj Zeytountsian, a prominent writer who was the independent country's first culture minister. ``And here we believe in our dreams. But now they are gone and we are left wondering what we have in their place. Peace is nice; we all love it. But peace of mind, that is even better.''

Long animated by a sense of justice and idealism that Armenians say set it apart from its neighbors, the country today is fighting simply to keep a grasp on the unique sense of solidarity it once held dear.

Not everyone cares of course: Working people want food on their table, and this year, for the first time in recent memory, most Armenians are able to buy it. But politically and emotionally, a country that had been remarkably unified is now split.

Leading opposition members of Parliament usually don't even bother to attend sessions. Opposition politicians and members of the press were beaten and jailed after the disputed elections that Ter-Petrossian won by a few percentage points - and the man he narrowly defeated, former Prime Minister Vazgen Manoukian, has only recently emerged from hiding.

Armenia may be more open and accessible than Azerbaijan, the oil-producing neighbor that Armenia has been fighting since the Soviet Union started to crumble. But people here do not want to be compared with their neighbors. They want to be compared with the West.

And even at the highest levels there is anger and fear that this has become a country where the defense minister could state on national television that he would never have accepted Manoukian's victory, ``even if he won 100 percent of the vote.''

Armen Sarkisyan, the new prime minister, who openly and with regret acknowledges the frailty of his country's democracy, said, ``We cannot tolerate people like that.''

``We must now move back from the precipice,'' he continued in an interview. ``Somebody has to speak to the opposition rather than blaming them for everything that is wrong with Armenia. Somebody has to say that the press is truly free and then stand by to guarantee it. Somebody has to convince our enormous diaspora that they are welcome and needed here, not just once for a visit but as often as they can come. Somebody has to make it clear that we will not just tolerate dissent, we will welcome it.''

They are noble words, and by all accounts he means them. But only one man rules Armenia today and while he insists in speeches and statements that democracy is sacred to him, Ter-Petrossian does not act as if it is.

The president's turn away from democracy began in 1994, when he banned a major opposition party and imposed restrictions on the press. Even now, with many of those restrictions lifted, there is a combined daily press run of only 31,000 copies for all newspapers in the country, which has a population of 3 million.

The fairness of parliamentary elections last year was questioned sharply by international observers, and a new constitution gives the president unusually sweeping powers.

``The situation in our country has become better,'' said Nagor Avedikian, editor of Azg, which means The Nation, an independent daily paper. ``The economy is not as desperate as it once was. There is no war. But as that has happened, our president has become more remote and autocratic. The truth is that he is a democrat only in the most Platonic sense.''