By HOMER BIGART
Special to The New York Times.

HAVANA, Feb. 25--Fidel Castro, rebel leader, has sent a proposal to end Cuba's worsening civil war.

Senor Castro demanded the withdrawal of all Government military forces from Oriente, the largest, richest and most rebellious of Cuba's six provinces.  For fifteen months the Cuban Army has been trying to dislodge Senor Castro's guerrillas from the forested peaks of the Sierra Maestra, in southwest Oriente.

Upon withdrawal of the Government forces, Senor Castro would agree to general elections under President Batista provided the elections were supervised throughout the island by the Organization of American States.

Interviewed Thursday outside a squalid hut deep in the sierra, where he was resting after a "major battle," Senor Castro explained why he wanted to have military control of Oriente as a precondition to elections.

With his own troops guarding Oriente polls and with foreign observers liberally scattered through all provinces, Senor Castro believes his 26th of July Movement would sweep the elections.

The Batista regime has set June 1 as the date for Presidential and Congressional elections.  Senor Castro wants more time for his movement and for "all other opposition parties" to organize their campaigns.  He said the elections should be held within a year, possibly in six months.

His proposal was submitted to a Cuban member of Congress who visited him secretly Jan. 28.  The Congressman was Representative Manuel de Jesus Leon Ramierez of Manzanillo, a member of the Liberal party, one of the four groups in the Government coalition.

The Representative's mission was unofficial.  He first ventured into the sierra early in January.  His sole aim was said to have been to dissuade Senor Castro from further raids on cattle herds near Manzanillo.  Meat is essential to the rebels' diet.

Senor Castro had the Representative arrested as a spy but released him after a lecture on the aims of the rebel movement.  The Representative went to Havana and, after consulting with members of the Batista Cabinet, returned to the mountains for what Senor Castro described as "exploratory talks."

President Batista had no prior knowledge of this venture.  He remained silent after garbled versions of the Castro plan leaked out in Havana.

Informed sources said President Batista could not conceivably accept Senor Castro's demand for evacuation of Oriente.  Senor Castro also insists that the Cuban Army leave all equipment behind for his own ill-equipped forces.

However, President Batista might agree to foreign observers for the election, the sources said.  They described him as supremely confident that his Presidential candidate, Andres Rivero Aguero, could swamp the disunited revolutionary opposition even with neutral supervision of the count.

If fifteen days in the sierra this observer saw no evidence of rebel strength sufficient to win a decisive action on the plains.

But Senor Castro appears deeply convinced that President Batista's power is crumbling rapidly and that the stepped-up campaign of sabotage being undertaken by rebel action groups in the cities will hasten his downfall.  Senor Castro's strategy will be to employ a general strike as the culminating blow.

"Batista will finish like Perez Jimenez unless he accepts some reasonable solution," Senor Castro said.  He referred to the overthrow of the Venezuelan dictator, Gen. Marcos Perez Jimenez, in a revolt also triggered by a general strike.

Senor Castro's proposal might seem a retreat from his previous insistence that no elections under President Batista would be acceptable to his movement."  His earlier demands were for a provisional government headed by Manuel Urrutia, a former judge in Santiago, capital of Oriente Province, who now is in exile in New York.

But in this interview, Senor Castro said that the Cuban Army's retirement from Oriente was the "sole condition" he had stipulated to Representative Leon Ramirez.

Should President Batista reject this demand, which seems most probably, fighting will continue "until we occupy the whole island," Senor Castro said.

The rebel leader said he would not insist on Judge Urrutia as Provisional President "if public opinion wants another man." Two months ago in an angry letter to the Cuban Council of Liberation in Miami, Senor Castro indicated he would accept no one else.

Today Senor Castro is much more conciliatory, although still dead set against the council's plan for a military junta to rule after General Batista.

[The Liberation Council was formed in Miami by representatives of all the major Cuban opposition groups.  Senor Castro's movement, although represented on the council, has frequently acted independently.]

"I do not believe in military rule," he said. "And there is a strong tradition in Cuba against military juntas.  All Latin Americans are tired of government by colonels and generals.  We do not want professional soldiers oppressing the people.

Judge Urrutia presided at the trial of twenty-two members of Senor Castro's eighty-eight-man invasion force who were captured when they landed on the southwest coast of Oriente Province in December, 1956.  Last May Judge Urrutia voted to acquit them on the ground the Constitution permits Cubans to resist oppression by any means.

Senor Castro revealed himself less intransigent on another point that has worried his supporters.  His statement that the armed forces of the movement would remain in a state of readiness throughout the tenure of the provisional government had alarmed other liberation groups, which regarded this as a clear threat to their political activities.

The rebel leader said he would order his men to turn in their arms and disband "a few months" after the new regime came to power.  But he attached these conditions:  "The army must be headed by a man I trust and the army ranks must be purged of elements guilty of torturing the people."

"Our forces will help to maintain order for an interim period while the army is purged," Senor Castro said.  "You could hardly expect us to give up our arms to the same army that has been fighting against us."

Senor Castro disclosed a growing disenchantment with United States policy on Cuba.  He said the State Department had made a secret agreement with the Batista regime late in January, under which President Batista restored Constitutional guarantees of human rights that had been suspended through most of 1957.

In return, Senor Castro said, the State Department agreed to act against Cuban revolutionary groups soliciting funds and arms in the United States.

As "evidence" of hardening United States policy toward the Cuban rebels, Senor Castro cited the arrest in Miami last week of Carlos Prio Socarras, former Cuban President, on charges of having violated United States neutrality laws.

Senor Castro has frequently denounced Senor Prio Socarras for failure to send arms to the Sierra.  But he said the arrest had "shocked and saddened all Cubans."

He said the alleged change in the United States attitude came after a visit to Washington by Ambassador Earl E. T. Smith.

In Washington a State Department official said "there is not a word of truth" in the charge that there was a secret agreement between the department and President Batista.

Senor Castro showed some uneasiness when questioned about his economic and social platforms.

The reason is obvious:  he is a symbol of a middle-class reform movement rather than of economic and social revolution.  His financial support has been derived mainly from wealthy and middle-income groups.

But to gain the wide support of Cuban labor, which is essential if his general strike is to succeed, Senor Castro may have to promise reforms that could frighten other groups of his supporters.

He said a group of university professors was working out his economic program.

On the touchy issue of nationalization, Senor Castro said he believed no public utilities or industries should be expropriated provided they were "operating efficiently" in private hands.  There would be no discouragement of foreign capital but a new central agency would be established to "control foreign investments."

He said he was "studying the problem of oil concessions."  He said he did not approve of the fifty-fifty formula for splitting oil profits with foreign companies.  Foreign oil companies should be subject to the same regulations as other foreign enterprises, he said.  The rebel leader asserted the new regime should "re-examine all economic arrangements made by the present Government."

On land reform, Senor Castro felt that no expropriation of privately owned lands would be necessary.  There is enough Government land for redistribution, he said.

Senor Castro wants more diversification so there would be less reliance on the sugar crop.

He said that new regime should break relations with "all Latin-American dictatorships."