A PROTRACTED wrangle over Haiti's derailed democracy is the likely result of the Organization of American States' decision Tuesday to use sanctions, rather than military force, to reinstall President Jean-Bertrand Aristide.The situation is complicated by the Haitian parliament's ratification Tuesday of a new president. The Washington-based association of 34 Western Hemisphere governments said Tuesday the new government is "illegal" and called for OAS members to "freeze the assets of the Haitian state" and impose an embargo. In Haiti, expectation of OAS military intervention had increased earlier in the week after talks between Haitian Army chief Brig. Gen. Raul Cedras and a visiting OAS mission were disrupted by a menacing band of 50 or so enlisted men who feared General Cedras would agree to Mr. Aristide's return. The OAS trade embargo announcement was met with condemnation from Haiti's center-right former presidential candidate Louis Dejoie Jr. In a country as poor as Haiti, "blockading the ports to leave us without anything to eat would be genocide," he said. But the OAS does not intend to break off dialogue, said Bernard Dussault, Canada's ambassador to Haiti. Tuesday's swearing-in of Supreme Court Justice Joseph Nerette as provisional president followed an Army assault on parliament the previous day by troops from the same hard-line faction that burst into the OAS meeting. The soldiers had surrounded parliament, fired into the air, and refused to let out 34 members of a crisis committee until they agreed to appointing a new president. Aristide, a Roman Catholic priest, swept Haiti's first-ever democratic elections last December. "They'd be happy with anyone as president, even a dog, as long as it isn't Aristide," says a diplomat who is closely following events. There was no visible sign of intimidation Tuesday when slightly more than half of the legislature's 107 deputies and senators turned up to vote unanimously for the new president. "We were not afraid for ourselves," said one deputy, who asked not to be named. "What we feared was the formation of a military junta, which would have been a catastrophe." Aristide's left-leaning populism, his tendency to brush aside parliamentary prerogatives, and a wave of threats and violence against parliamentarians by radical groups in August helped boost the vote, insiders said. A low-profile judge with no political experience, Mr. Nerette is expected to lose no time in forming a government under the supervision of parliament while elections are staged within the constitutionally set limit of 90 days. The Constitution bars Aristide from running for a second term. Many expect such a contest to follow the pattern set by the rigged election of Leslie Manigat in January 1988. It is hard at the moment to gauge the mood in the capital's slum districts and shantytowns, where some 250 to 500 people have been killed by soldiers since Aristide's ouster. "At the moment the people are tired, terrorized by the Army, and disoriented by the absence of their charismatic leader," says a political scientist sympathetic to Aristide. "But some way down the road there will be a social explosion."