MATISSE AND PICASSO A Friendship in Art By Franc oise Gilot Doubleday. 340 pp. $30

THEY WERE the undisputed grand masters of the School of Paris, irreplaceable figures in the history of modern art: Matisse, the master-magician of color; Picasso, the vivisectionist of form. For well over half a century, beginning around 1905, when Matisse's "Woman With the Hat" with its slashing Fauve colors was the scandal of the Salon d'Automne, and 1908, when Picasso's "Les Demoiselles d'Avignon," with its savage dislocations of the figure, was the closet-masterpiece of the Cubist revolution, their influence over the course of modern art would be supreme. In those early years, they were rivals for the same vanguard patrons -- notably the American Steins (Gertrude and Leo, Michael and Sarah) and the Russians, Sergei Shchukin and Ivan Morosov. Throughout their early careers they were wary competitors, indispensable opposites -- "North Pole, South Pole," Matisse would say) -- assured by some inner conviction, one assumes, that there were no others on their horizons. In their later years, world-famous both, they were equally wary friends, occasionally trading paintings and salutations. Their meetings, more often than not, were in one of Matisse's residences in Venice or Nice: Matisse, resting in bed, gently stroking a cat; Picasso, more circumspect than relaxed, eyeing Matisse's latest efforts on the walls.

"It was rather touching to see how patient and flexible he {Picasso} could be in order not to challenge or hurt his friend's feelings." So Franc oise Gilot remembers the pair in her engaging memoir, Matisse and Picasso: A Friendship in Art, drawn from her 10-year relationship with Picasso and the lively visits and conversations Picasso held with Matisse in which she took part. She suspected, she tells us, that Picasso might have entertained the same feelings for Matisse that he had for his father, a minor painter and teacher: "the tenderness, the admiration, the wish to please, the fear of rejection, as well as the not-so-paradoxical need to rebel or criticize." It is one of the frequent, altogether relevant, insights that she brings to bear on a still intriguing subject.

Gilot's earlier memoir, Life With Picasso (1964), written in collaboration with Carleton Lake, was a bestseller -- to the dismay and rancor of Picasso's hangers-on. (Picasso tried and failed to bring an injunction against the publication of the book in France.) It was the chronicle of a young and attractive art student who, having first met the artist in 1943, when she was 21, began sharing his life three years later; became the mother of two of his children, Claude and Paloma; was privy to his thoughts about his work and his sardonic remarks about his contemporaries and rivals during a period when he was in the process of re-establishing his reputation in a much-changed world. Given Picasso's possessive and demanding attitude towards women, theirs was a stormy but not altogether unhappy affair which came to a predictable ending with an acrimonious separation in 1953. Gilot's portrait of Picasso in that memoir remains one of the most vivid, informative, though admittedly partisan glimpses we are likely to get into the life and work of a major artist.

Gilot's new memoir is more relaxed and reflective, focused on questions of art and the relationship between the two legendary artists, though it does necessarily go over some of the old ground of her life with Picasso. It offers wonderful accounts of the state visits between Matisse and Picasso, painstakingly arranged beforehand with mandarin-like courtesy. Picasso would grow restless when the intervals between visits seemed too long, force himself to dial directly to initiate a meeting. "Whatever has been said or written to the contrary," Gilot observes, "this was the one relationship in which Pablo was extremely careful not to be negative in any way."

The liveliest portions of the book are the intermittent conversations between Matisse and Picasso and the follow-up commentaries between Picasso and Gilot after the visits. Here is Matisse, repeating in an easy, self-serving way something Renoir had told him, years earlier: "In your pictures black is a color, black does not recede, it does not create a hole in the surface of the canvas, it is solid. I can't understand how you manage this effect, but I do understand that it implies real talent."

It is one of the nicer ironies of the book that Gilot claims to have been more in sympathy, aesthetically, with Matisse's work than with Picasso's -- a failing for which Picasso chided her often: "As far as Matisse is concerned, you become as protective as if he were made of sugar."

And here is Picasso, in one of his antic moments, commenting on the giraffe and the kangaroo, those oddball creations of the Almighty: "Well, after all, God was only an artist like us all, never being able to make up his mind once and for all . . . Diversity, diversity, that's the point." Gilot, however, gives the reader fair warning: "The dialogues are not verbatim; the visits to Matisse are not quite in chronological order, and at times several meetings are contracted in one." This is, then, a memoir with a difference, something on the order of a collage pieced together from bits of reality rather than the strictly ordered historical document scholars might prefer, but an essential addition, nonetheless, to our understanding of the two men.

This is a book best read in leisurely fashion, a chapter or two at a time, in the unhurried way one might enjoy the shuttered light or the luxuriant views from the balcony in afternoons at Cimiez or Vallauris. Matisse once commented to Picasso: "As long as some painters continue to be interested in our ideas or our works, we will not be dead." Gilot's book certainly helps to keep those memories green. James R. Mellow has completed work on a biography of Ernest Hemingway, the third volume of a trilogy on the Lost Gener-ation, which includes already published biographies of Gertrude Stein and F. Scott and Zelda Fitzgerald.