On one of the last battlefields of the Cold War, peace in ou lifetime.

Although it may be a bit premature to break out the champagne and celebrate the end of Africa's second-longest civil war, there is reason for genuine optimism that peace may finally be at hand following Wednesday's agreement in Estoril, Portugal, on a cease-fire between Angola's Soviet-backed government and the U.S.-backed rebels.

"There were no winners and no losers today," said Portuguese Foreign Minister Jose Manuel Durao Barroso. "The only winners are the Angolan people."

If all goes well, a final agreement will be signed later this month and a United Nations-supervised cease-fire will be implemented. Only then will Angola's nine million people know that 16 years of civil war -- resulting in an estimated 300,000 to 500,000 deaths -- have ended and that the country is finally on its way to democracy and political reconciliation.

For the first time in Angola's 30-year nationalist struggle, the ruling Popular Movement for the Liberation of Angola (MPLA) and the rebel National Union for the Total Independence of Angola (UNITA) will openly compete against each other in political dialogue. Popular elections for parliament and president slated for late 1992.

Both MPLA and UNITA fought for independence from Portugal; when independence was granted, MPLA became the governing party and UNITA the guerilla opposition. As political winds shifted, UNITA, led by Jonas Savimbi, received support at various times from China, South Africa and the United States.

Although a timetable for multi-party elections has been set, one of the biggest obstacles facing Angola's fragile road to peace and reconstruction will be the creation of a national army from two large military forces.

xTC "The international community's greatest contribution can be to help Angolans help themselves to carry out their sincere desire to establish peace in their country for the first time in 30 years," said Gerald J. Bender, director of the University of Southern California's School of International Relations. "In addition to assisting monitors of the cease-fire and scheduled election, some countries may usefully serve as interlocutors between the MPLA and UNITA, similar to the role that the U.S., the Portugal and the Soviet Union played in Lisbon."

While Angola's former colonial power, Portugal, officially mediated the cease-fire, the United States has played a pivotal diplomatic role in achieving the settlement.

Although officially only an observer at the peace talks, the Bush administration has been working the last five months on a process to integrate the 150,000-man army of the Soviet-backed MPLA with 50,000 guerrillas from the U.S.-backed UNITA.

The administration has been encouraged by Angolan president Jose Eduardo dos Santos and UNITA leader Jonas Savimbi, who cautiously endorsed the idea of a national military, although neither side has yet to formally agree on the specifics of the proposed plan. The U.S., however, retains a unique role with both sides to assist a settlement.

"Somebody has to do it," said I. William Zartman, African studies professor at the Johns Hopkins University's Nitze School of Advanced International Studies. "Both sides want a relationship with the U.S. The Portuguese and the Russians don't matter much to them. That's the source of our leverage."

While the specifics remain secret, general outlines of the plan have emerged.

Administration officials, U.S. intelligence analysts and foreign diplomats envisage a 50,000-man national army. The army will be roughly composed of equal numbers of troops from both sides.

A potentially serious problem is the gradual demobilization of at least 150,000 men. If mishandled, demobilization could result in a major internal security concern for any new government. Former combatants might turn to widespread banditry and brigandage that has characterized much of the civil war.

Moving from mistrust to trust in a vast country that has never grown used to peace may prove uneasy and difficult, especially if there are serious cease-fire violations or widespread incidents of intimidation.

"The MPLA wants a national army in place before elections, but UNITA is reluctant," said one administration official. "They [UNITA] are fearful that the MPLA is trying to disarm them. They want to be persuaded that this is going to be a free election without intimidation before they totally give up their arms."

To ease the pressures of demobilization, intelligence analysts said the process would call for a mass vocational education program for former combatants. They would be taught farming and other economically useful skills needed for restarting Angola's war-ravaged economy.

The plan also calls for the elimination of much of Angola's air force, including advanced Soviet-made MiG fighter-bombers and attack helicopters. Intelligence analysts said this sophisticated weaponry is no longer needed, since Angola now longer faces the threat of a major conventional invasion from South Africa.

The Soviet Union, also played a crucial role in pressuring Angola into the political agreement.

Angola's government bought about $5 billion in Soviet weaponry during the war. Although the Soviets have received partial payments and economic concessions, intelligence analysts said

the Kremlin hopes to recover Angola's remaining debt in much-needed hard currency.

The U.S. will have accomplished a major foreign policy goal, when the last of an estimated 50,000 Cuban troops withdraw from Angola. Cubans have been in Angola for the past 16 years, supporting the MPLA in the civil war and against invasions from Zaire and South Africa.

With an economy no longer burdened by war, Angola could potentially be one of Africa's richest countries. It currently earns $2-3 billion a year in oil revenues, an amount that could double under peace-time conditions. Angola also has major reserves of diamonds, manganese and copper, as well as such cash crops as coffee, sugar, tobacco and bananas.

Angola's ruling MPLA government has tried to gear up for reconstruction, jettisoning its ineffective Marxist economic policies and joining international lending institutions, such as the International Monetary Fund and the World Bank.

An unofficial Western consortium -- including the U.S., Portugal, Britian, Spain, Brazil, Italy, Belgium and South Africa -- has formed to aid a peacetime Angola's economic reconstruction. "People will look upon Angola not as another basket case," said one administration official. "The international community will help provide needed skills."

S.M. Khalid is a reporter for The Sun.