Ethiopia Leader Tells of Execution of Coup Figure. By JANE PERLEZ, Special to The New York Times Published: May 19, 1989

Ethiopia Leader Tells of Execution of Coup Figure

By JANE PERLEZ, Special to The New York Times

Published: May 19, 1989

President Mengistu Haile Mariam of Ethiopia, who rushed home from East Germany to put down a coup attempt, announced tonight that the leader of the largest rebellious army unit had been executed.

Western diplomats in Addis Ababa reported that Gen. Demessie Bulto, apparently a key figure in the coup attempt on Tuesday, was killed by junior officers in the Second Army stationed around Asmara, in the northern province of Eritrea.

The coup attempt against President Mengistu, a lieutenant colonel, was the first since he emerged as leader of the rigidly Marxist-Leninist state in the horn of Africa after the overthrow of Emperor Haile Selassie in 1974.

Less than 24 hours after he cut short a state visit to East Germany and returned to Addis Ababa, the capital, Colonel Mengistu went on television and radio tonight to declare, ''Our revolutionary army has liquidated the traitors collaborating with the secessionists.''

But in Asmara, which was retaken from the rebellious Second Army officers by loyalist soldiers on Wednesday, the Government radio went dead tonight, leading to speculation among Western diplomats that there was serious fighting within the unit. The Second Army, with about 175,000 men, is the largest unit in the Ethiopian military and is stretched through a large swath of Eritrea.

After the Government announced on Tuesday night that two leaders of the uprising had been killed and the coup put down, senior officers of the Second Army, which has been bearing the brunt of the civil war against the rebel Eritrean People's Liberation Front, announced they supported the coup attempt. In radio broadcasts from Asmara, the rebellious officers continued to call for the ouster of Colonel Mengistu, a negotiated settlement to the 28-year civil war and the introduction of a provisional government.

Ethiopia's main patron, the Soviet Union, has been pressing the Mengistu Government to concede that its fight against rebel movements in Eritrea and Tigre is militarily unwinnable and seek a settlement. Army Unit and Rebels Reconcile

Diplomats in Addis Ababa said by telephone that the unit had reached a reconciliation with the Eritrean rebel front, which has been fighting for the territory's independence. At the same time as the officers' announcement, the rebel group said they were starting a two week cease-fire.

Such an agreement between the largest unit in the Ethiopian Army and the rebels posed an almost intolerable threat to Colonel Mengistu's hold on power, knowledgeable Ethiopians in exile said.

The Government radio in Addis Ababa announced earlier today that another coup leader, Industry Minister Fanta Belai, a former commander of the Air Force, had been arrested.

Diplomats in the capital said Colonel Mengistu's fortunes fluctuated during the day. But by evening, with the announcement of the execution of the head of the Second Army and the President's television appearance, his standing had improved.

Businesses and schools reopened today in Addis Ababa and Government officers reported to work, diplomats said. But the international phone lines were cut for part of the day and the airport remained closed.