Zia to loosen grip but stay in control. Under growing pressure, Pakistan's leader is expected to lift martial law soon. But he will still hold the reins through handpicked officials and judicial changes he's already made.

Pakistan's President Muhammad Zia ul-Haq is expected to end 81/2 years of military rule in Pakistan before the year's end -- with accompanying fanfare. But the new year is likely to usher in a new brand of civilian rule that retains many elements of a tightly controlled government under General Zia, Western and Pakistani analysts say.

``Anybody who thinks there will be democracy in the Western sense is being naive,'' says Malik Saeed Hassan, president of the Lahore High Court Bar Association.

There is widespread doubt that the lifting of martial law will reduce the military's role in the decisionmaking process. The current martial law administration will be disassembled. But over the years, Zia has molded a civilian bureaucracy in which key positions are held by hand-picked backers -- most of them retired military officers who have donned civilian clothes.

Zia himself will continue to hold almost limitless powers even within a civilian structure. Before the newly-elected National Assembly was convened earlier this year, Zia introduced drastic amendments to the 1973 Constitution. These changes enable him, among other things, to hold the offices of President and Army chief of staff simultaneously, to declare a state of emergency, which allows for the indefinite suspension of fundamental rights, and to dissolve the National Assembly at his discre tion.

Also, all martial law regulations, presidential decrees, or orders since 1977 have been indemnified or validated and continue as laws without being subject to any judicial review or repeal. And the President has the power to continue the suspension of fundamental rights without declaring a state of emergency. While military courts are to be dismantled, the judiciary's constitutional jurisdiction has been sharply curtailed, except in ordinary cases such as murder or civil crimes.

In government actions taken earlier this week, many Pakistanis in Lahore saw what they believe were portents: In a bid to forestall a large opposition meeting on Wednesday, at least 30 members of the Movement for a Restoration of Democracy, an 11-party coalition, were arrested. Two hundred people were arrested after clashes with security forces, but most were freed yesterday.

Zia has been promising a return to democracy since he overthrew (and later executed) former Prime Minister Zulfikar Ali Bhutto in a military coup in 1977. But he has manged to keep a tight lid on political opposition.

Zia may find a transition to civilian rule more troublesome if political opposition groups step up agitation, observers here say. But for now, these groups are neither strong nor united enough to pose any real threat. The Pakistan People's Party, the largest in the opposition alliance, remains disorganized, and its leader, Benazir Bhutto, daughter of the former prime minister, lives in exile in London.

Nonetheless, there are some fears that martial law could again be imposed, if political activity should become widespread.

However, some analysts contend that the political climate in Pakistan is changing gradually from a rigid regime to a more flexible one. A Western diplomat said that, despite its nonpartisan character, the recently elected National Assembly is perceived as a widely accepted legitimate political forum.

Zia's critics point to several areas in which Zia needs to bolster his image:

They have accused the Pakistani leader of using Islam as a political slogan and as a way to perpetuate his power. Last December, he held a referendum on the continuance of Islamic laws in the country, and used it to give himself a mandate for five more years in power.

Charges of graft and corruption are mounting against Zia's relatives and supporters.

Pressing domestic problems such as declining literacy and low health expenditures have made Zia an unpopular leader, despite his religious appeal.

After several years of more than 6 percent average annual growth, the economy is showing signs of decline, with foreign exchange earnings from Middle East remittances drying up, a huge, steadily rising, external debt, and a stagnant industrial-capacity base. Zia is asking the US to double a $3.2 billion economic and military aid package to Pakistan for the next five years, starting in 1986.

Although Zia has become a valuable ally of the United States since the Soviet invasion of Afghanistan in 1979, he has been under increasing pressure from the US to relax his military grip.

``Zia is a very shrewd politician who is sensitive to pressure,'' says a Western diplomat. In addition, the presence of three million Afghan refugees in Pakistan also poses a potential destabilizing threat.

Whether Zia will retain the powerful provincial governors or replace them with new civilian appointees is a closely guarded secret for now.

``If the military is indeed sent back to the barracks, then it is an important step,'' says Pakistani political analyst Ayaz Amir. But Mr. Azmir discounts the possibility, which he says would go against the current pattern.

Many believe that Zia will exercise his option of holding two offices to minimize the possible threat of another military coup, and thus enhance the civilian government's chances of survival.

At the same time, analysts say, he would prefer to leave the day-to-day affairs of government to Prime Minister Muhammad Khan Junejo. Mr. Junejo, however, is widely seen as a weak and nominal figure who is not expected to provide an effective counterbalance to Zia.