At first it looked like a harmless brawl among tin-pot Marxists. But the peculiar coup on the tiny island of Grenada quickly escalated last week into an affair of a larger order. Six days after Grenada's Prime Minister Maurice Bishop was placed under house arrest by a band of hard-line rivals, a group of his own supporters freed him. They accompanied Bishop to a Grenadian Army compound. But there, troops loyal to the rebel military junta recaptured Bishop and executed him. The bloodshed prompted Ronald Reagan to dispatch a U.S. naval task force led by the aircraft carrier Independence and manned by 2,000 Marines toward Grenada. The official purpose was to ensure the safety of 1,000 Americans, most of them medical students, who were trapped on the island. But the saber rattling raised another question: was the president intent on a simple exercise in gunboat diplomacy-or was he, in fact, considering a U. S. military invasion of Grenada?

The administration clearly did give some thought to sending in the Marines. The bloody coup in Grenada deeply alarmed American allies throughout the region, and several of Grenada's neighbors consulted with administration officials about the possibility of a U.S. military operation. Their suggestion was that although an American intervention might be "distasteful," the United States had to "do something" about Grenada. As the Independence set course on a route that would put it off Grenada by Sunday, the Pentagon said that it had drawn up several contingency plans for evacuating the Americans on the island. And administration sources con
firmed privately that an armed amphibious landing was one of the options.

Invasion Options: For administration hard-liners, the temptation to intervene was obvious. Logistically, they argued, the operation would be relatively simple: Grenada has wide-open beaches, negotiable terrain and only a small, poorly equipped army to defend the island. Reagan had always suspected Bishop as a Soviet proxy and feared that the new junta would tilt further in the same direction; an invasion would offer the opportunity to get rid of the Marxists and help install a more
friendly government on the is land. Hitting the beaches simply to rearrange the leadership in St. George's sounded like overkill. But a successful military strike in Grenada would also send a strong signal to Nicaragua's Sandinista junta, to Cuba's Fidel Castro and to the Soviet leaders in Moscow that Washington was prepared to play a rough new game in defense of its hemispheric interests.

The risks were also manifest. The 2,000man Grenadian Army might put up a stronger fight than expected. Grenada was also crawling with Soviets and Cubansmost of them technicians and laborers, but also some military advisers-who could lengthen the odds against a quick, mop-up victory. If the operation went awry, it might jeopardize American lives, not save them. And while an invasion might allay the jitters among some of Grenada's pro-Western neighbors, it probably would not go down so well with other Latin Americans who are deeply sensitive about anything that smacks of America's old big-stick interventionism. A move against Grenada could also set off another showdown between the White House and Congress over the president's war powers authorities.

Assurances: Perhaps in response to the war talk from Washington, Grenada's new leaders began offering assurances that seemed designed to head off a U.S. intervention. The junta issued a call for national unity to "turn back any foreign military aggression." But it also said it would allow two U.S. consular officials from Barbados to visit Grenada and to meet with the U.S. citizens. In an announcement over Radio Free Grenada, junta spokesman Maj. Christopher Strode insisted that the new government hoped to establish better relations with Washington than Grenada has had in the past. Strode promised that in two weeks the military would hand over power, to a committee representing all sectors of Grenadian society. He said that the new regime's chief domestic priorities would be development and jobs, and that it would pursue a "non aligned" foreign policy.

The administration's calculations were complicated by the fact that it was still unclear exactly who was running Grenada. Two weeks ago, when Bishop was placed under house arrest, the man behind the Putsch was believed to be Deputy Prime Minister Bernard Coard. An old friend and ally of Bishop's, Coard had turned against him for not moving fast enough to implement pure, hard-line socialism in Grenada. But after last week's massacre in St. George's, in which Bishop was executed along with three of his top cabinet ministers and two union supporters, a new strongman seemed to take over. Gen. Hudson Austin went on Radio Free Grenada to announce that he would head the new 16-member military council. He imposed a round-the-clock curfew and said that violators would be shot. Briefly,
speculation continued that Coard was still running the new government from behind the scenes. But it seemed increasingly likely that Austin, also a radical Marxist, had edged Coard aside. There were various reports that Coard had fled the island, was under house arrest-or had been executed.

Whoever was in charge, it was clear that opposition to Bishop had been building for a long time. In 1979 Bishop and his Marxist-inspired New Jewel Movement staged a coup that toppled former Grenadian strongman Eric Gairy, an eccentric autocrat known for his obsession with flying saucers and the brutal use of henchmen known as "the Mongoose Gang." Since the charismatic Bishop had such widespread support on the island, other members of the NJM, including Austin and Coard, initially accepted him as the best man to run the new government.

Power Hungry: But as time went by, relations between Bishop and his lieutenants began to sour. Bishop's approach to socialism allowed 60 percent of Grenada's economy to remain in private hands. Coard and his even more radical Jamaican wife, Phyllis, thought that that wasn't revolutionary enough. Coard also started to emerge as the real brains behind the revolution-the architect of Bishop's foreign policy and the man who kept the Army in line. Other members of the NJM's Central Committee began to suspect that the revolution would run better if Coard was in charge. Some of Bishop's NJM comrades also believed that the prime minister was growing too power hungry.
 
More than a month ago, according to insiders, the Central Committee voted unanimously that Bishop should share power with Coard. At first Bishop asked for eight days to think it over. Then lie left on a trip to Romania and Czechoslovakia-and the committee decided to implement the collective-leadership scheme without him. When Bishop returned, the murky situation grew even more confusing. Coard denied any shake-up-and resigned as deputy prime minister. But then Bishop's supporters learned that he was under house arrest. They began to stage a series of rallies calling for his reinstatement. Finally, the loyalists organized an
attempt to free Bishop. Several thousand supporters descended on his residence in St. George's, where Bishop was under detention with his education minister and
consort, Jacqueline Creft. Ignoring warning shots from soldiers who were guarding the house, they stormed the gates and freed Bishop and Creft.

Massacre: The loyalists lifted their hero and carried him away. Their first stop was Market Square, where Bishop gave a brief speech. Chanting "we want our leader back," the crowd then proceeded to Fort Rupert, a Grenadian Army compound near t lie city harbor. There were conflicting reports of what happened next. The junta claimed that Bishop disarmed the troops at Fort Rupert, then provoked a gun battle in which he and 18 others were killed. But eyewitnesses reached by phone from outside Grenada gave a different account. They said that the Army troops opened fire first, then rounded up Bishop and several of his top supporters. As Bishop pleaded for mercy, they took the victims into the fort-and shot them in a burst of point-blank gunfire Along with Bishop, the soldiers killed Creft and several of the allies who had helper organize their liberation: Unison White man, Bishop's foreign minister; Norris Bain, the housing minister; and two union leaders Vincent Noel and Fitzroy Bain.

The massacre stirred outrage and apprehension throughout the eastern Caribbean In neighboring Barbados, Prime Minister Tom Adams denounced Austin's junta as group of "disgusting murderers." Jamaica' leader Edward Seaga broke off diplomatic relations with the new regime. He was joined in his outrage by his predecessor socialist Michael Manley, who said that hi felt "a sense of betrayal" over the coup and threatened a move to have Grenada ejected from the Socialist International. Last week end, leaders of the Caribbean Community and Common Market (CARICOM) met ii Trinidad to review options for a trade embargo or other sanctions against the Grena than government.

Cuban Denial: In the immediate after math of Bishop's murder, some U.S. officials speculated that Cuba might have had hand in the coup. But others doubted that the Cubans were directly involved. They noted that Castro was a warm friend and supporter of Bishop's and that the Cuban leader had even thrown a party for Bishop several weeks ago when he returned from Eastern Europe. After Bishop's death, the Cubans released an unusually strong statement denying any involvement. "No doctrine, principle or proclaimed revolutionary position," it read, "and no internal split justifies such brutal procedures as the physical elimination of Bishop." The Cubans also said that they would re-evaluate their relations with Grenada. But they did not give any firm indication that Castro would refuse to help the new junta.

A more likely possibility was that Moscow may have helped stir trouble in Grenada without consulting Havana. Coard, in particular, had strong ties to the Soviets. He accompanied Bishop to Moscow in 1979 to sign a bilateral cooperation agreement, and sources said he returned for another visit to the Soviet capital last year. Whatever role he played in the coup, Coard probably would have let the Kremlin know about it. The only Soviet response to the coup last week was a statement that welcomed the "people's revolution" in Grenada but made no mention of Bishop's death.

The Reagan administration had long had nothing but harsh words for Bishop. For two years Reagan attacked him for failing to hold elections, for stifling dissent and for inviting hundreds of Soviet and Cuban advisers and laborers into Grenada. During a televised address last March, the president showed aerial reconnaissance photos of the new Grenada airport. He charged that Cubans were helping to build a 9,000-foot runway to accommodate Soviet warplanes.

Recently, however, the spy-war between Reagan and Bishop had begun to calm down a bit. Last summer Bishop visited Washington and was given a hearing by national-security adviser William P. Clark. According to White House sources, Clark told Bishop that Washington wasn't asking Grenada to roll up its runway or expel any Cubans-only to soften its anti-American rhetoric and not increase the Cuban contingent. No concrete steps toward a rapprochement ever came of that meeting. But Bishop's willingness to consider warm relations with Washington may have been one reason his hard-line comrades decided to move against him.

Suspicion: By all appearances, Reagan will have an even tougher time finding any common ground with Grenada's new leaders. Neither Austin nor Coard has Bishop's charisma or popular support; as a result, whichever man is in charge will probably have to depend even more heavily than the old government did on any support he can get from Cuba or the Soviet Union. From Washington's perspective, there was one promising development: after seeing what had happened to Bishop, the other leaders in the Caribbean may now be more suspicious than ever of Marxism and the Soviet bloc. Where the appearance of the USS Independence might once have caused outrage, this time it almost seemed welcome.

MARK WHITAKER with JOHN WALCOTT, THOMAS M. DeFRANK and KNOLLY MOSES in Washington and LINDA PROUT in Barbados