A DROP in fighting across El Salvador and positive signals from peace talks between the government and rebels are raising hopes that the 12-year war that has ravaged this country may be reaching its last stage.But fighting in rebel-dominated areas, differences on some issues at the talks, and a recent US congressional statement implicating leading members of the Armed Forces in the 1989 murder of six Jesuit priests indicate the road to peace and national reconciliation will be far from smooth. United Nations-mediated peace talks continued this week in what some negotiators have dubbed the "last round" before cease-fire. Both sides have previously said a cease-fire could be possible in December. "We want the armed conflict to end this year," rebel leader Schafik Handal said recently. To underline the point, the Farabundo Marti National Liberation Front (FMLN) suspended hostilities more than a week ago. President Alfredo Cristiani welcomed the move as a "positive step" that could "generate a better environment" for the talks. Late last week in a reciprocal gesture of good will, the government suspended the use of heavy artillery and aerial bombardments. Fighting across El Salvador has dropped dramatically. The government continues, however, to mount operations in areas in the mountainous north and east, traditionally dominated by rebel forces. And soldiers and guerrillas continue to die. A year and a half into the talks, participants acknowledge discussions are likely to get more delicate as the cease-fire approaches. The sides must still agree on several issues, including participation of former FMLN rebels in a new National Civil Police that would be independent of the Armed Forces. The rebels see participation in the new force as guaranteeing implementation of peace accords, and their own security after the war. Minister of Defense Rene Emilio Ponce has said that after demobilization, former FMLN members will, as civilians, be able to join the police academy. Some military hard-liners disagree. "I don't think they should be in the National Civil Police," says Col. Francisco Elena Fuentes, head of San Salvador's main infantry garrison. Rebel leaders, however, envisage a very different scenario, where the growth of the police force would develop along with reduction of FMLN combatants. Politicians and diplomats warn there will be no definitive cease-fire before negotiators agree on all topics under discussion. Some say that if progress is slow, military operations could be formally suspended in December before a definitive cease-fire next year. "If we get peace," says opposition leader Ruben Zamora, "people won't be saying it should have been signed on white paper or blue paper." Yet the war continues to dog the process. Last week United States Representative Joe Moakley (D) of Massachusetts, who leads a Congressional Task Force on El Salvador, released a statement implicating military officials, including General Ponce and Col. Elena Fuentes in the 1989 Jesuit murders. "We energetically reject these irresponsible assertions which are based on simple speculation," Ponce said in reply. President Cristiani defended his Minister of Defense, saying the courts should deal with the problem. Whoever was responsible, the case highlights a reality here that even the euphoria of a possible cease-fire has not removed. The state has been unable or unwilling to guarantee Salvadoran rights, though it appears likely the future success of the peace process will be judged on its ability to supply basic rights.