PUERTO CABEZAS, Nicaragua (AP) _ About 400 Indian Contra rebels with U.S.-supplied weapons have switched sides and become members of the Sandinista government's army they had been fighting for five years.

One of their leaders said they stopped fighting to overthrow the leftist Sandinistas because they didn't have U.S. support.

''If the American government and the Congress that maintains power in the United States, if they understood us, we could have fought the Sandinista government until the bitter end,'' Uriel Vanegas, one of the Contra leaders, told reporters covering the event.

Sandinista military officials said about 400 Contras, mostly Miskito, Suma and Rama Indians, switched sides in this area Saturday.

Uriel, 23, led in a squad of about 80 of rebels through this humid, palm- covered fishing port of about 20,000 people, in northeastern Nicaragua, on the Atlantic Coast, near the Honduran border.

Dressed in new U.S.-made camouflaged fatigues, the 80 rebels marched to the dusty main square, where they stood in rows of three, sweat running down their foreheads, clutching Soviet-designed AK-47 assault rifles, which had been supplied to them by the United States.

After their decision was announced to a crowd of chanting Sandinista supporters, Interior Minister Tomas Borge said, smiling, ''It was a definitve blow to the armed activity in the Atlantic Coast.''

In a brief speech, Borge, who flew in from the Nicaraguan capital for the surrender, welcomed and praised their decision and incorporated them into the Sandinista army.

The new recruits stared straight ahead, expressionless, while Vanegas said they were not surrendering and would not turn in their arms. But under an agreement between Vanegas and the government, the Indian rebels became part of the army and will fight other Contra groups and the ''imperialist aggression.''

''Long live the Sandinistas 3/8'' a group of pro-government youths chanted.

Vanegas made it clear he and his groups were not supporting the Sandinistas, but that they switched side because they lacked American backing.

''We don't support the Saninistas,'' Vanegas said, toying with a gold Orient watch with a single diamond chip that Borge had given him as a gift. ''This is a gentleman's agreement. The Sandinistas have their project, with the Soviets or Cubans, or whatever. This is a war of interests.''

Vanegas said he decided to switch sides because the Contra Indians were always the subordinate ''little brothers'' to the main U.S.-supported Contra groups, the Nicaragua Democratic Force.

The Force, he said, has received most of the $100 million in military and other aid approved by Congress, which the Reagan administration provided the rebels in the past year.

According to the rebels here, the Contra Indians numbered from 500 to 1,000, out of a total of about 15,000 rebel combatants. Saturday's defection means there are as few as 100, or as many as 600 Indian fighters still left among the Contras.

Because of the remoteness of the region, news could not be filed immediately.

The Indians, who inhabit the isolated, jungle-covered Atlantic Coast, want mostly to be left alone. Their problems began in 1981, two years after the Sandinistas seized power, when they resisted a Sandinista effort to join the leftist revolution.

Almost all of the Indians speak English, compared with the rest of Nicaraguans who speak Spanish, and they were under British rule until the late 1800s, when Britain ceded the territory to Nicaragua.

The Sandinistas forced thousands of Indians to leave their homes ancestral homes, and resettled thousands of others in camps inland, because they considered them ''a threat'' to national security.

An estimated 25,000 also fled across the Coco River, which divides the two countries, into neighboring Honduras where they lived in squalid refugee camps.

Later, the Sandinistas publicly acknowledged their ''error'' and made great efforts to woo the Indians back, granting them limited autonomy to levy local taxes and govern themselves at the municipal and regional level, promising to help them preserve their ethnic culture.

''This is what is important to us,'' Vanegas told reporters, referring to the need to preserve the Indian culture. ''We could have been the most anti- Saninista.''

Vanegas, who said he he had been fighting the Saninistas since 1981 and was trained in the United States, added: ''My strength is the internal anti- Sandinista resistance here in Nicaragua. And now the war here is mostly over.''

He claimed he was not surrendering, nor was he asking for amnesty, but said the war needed a negotiated political solution. ''It's like people talking German or French,'' he said. ''I don't understand.''

A new Central American peace signed by the region's five presidents in Guatemala on Aug. 7 calls for El Salvador, Nicaragua and Guatemala - all facing insurgencies of either the left or the right - to call cease-fires, declare amnesty for political prisoners and take specific steps toward democracy by Nov. 7. Honduras and Costa Rica were the other Central American nations to sign.