Into the crowd of Libyans and their American guests strode big, bad Billy Carter. As TV lights exploded in white-light glare, the president's brother planted a big kiss on the cheek of Ahmed Shahati, head of Libya's foreign liaison office.

The press swarmed around immediately. Relations with his brother are "as good as ever, even better," insisted Carter -- despite his controversial remarks about Arabs and Jews and his friendship with the Libyans, who represent a radical Arab nation.

"I only said that there were more Arabs than there was Jews," said Carter, who seemed bewildered that this oft-repeated comment -- coupled with "the Jewish media tears up the Arab countries full time, as you well know" -- has created an outpouring of criticism.

Carter said he spent two hours with his older brother Sunday night "at his house," otherwise known as the White House. What did they discuss? "Fly fishin'."

Was his brother embarrassed by Billy's free-lance foreign relations? Not at all, said Billy. How does he feel about you meeting with Libyans? "He's supported it." How does the president feel about his showing up tonight? "I'm here with the Libyans and they're friends of mine. And when they leave they'll still be my friends."

Billy Carter was calmly answering the questions thrown at him last night at the Madison Hotel reception. The 'token redneck," as he likes to call himself, had cleaned up his act. He used to say he was a red, white and blue patriot -- red neck, white socks and Pabst Blue Ribbon beer -- but last night he was in a three-piece light brown suit, foulard print tie and python boots. He said "ma'am" to questions from women reporters.

Then, asked about the stories from the White House that his brother was truly embarrassed this time around, Carter shot out, "The ones who say that, baby, are straight a -- s."

Later in the evening while Carter joked with Libyan friends at a hotel bar, the question was raised again. Did anyone try to talk you out of appearing with the Libyans? "No, not at all." "What would you have said if they did? A shrug and grin. "Kiss my a - -."

In part it was a stock Billy Carter performance. He is the uncontrollable younger brother who parlayed his good ole boy booze-swilling image into more money a year through public appearances and business ventures than his brother makes as president of the United States. The "First Yahoo", as some in the White House press corps call him, presides at the Third Annual World Belly Flop and Cannonball Championship and -- as has been monumentally reported -- relieved himself on the side of a building while waiting at the Atlanta airport for the Libyan delegation to arrive last month.

But his latest comments, construed by many as antisemitic, and the use of "nigger" in a racist joke, plus his association with the Libyans, seem calculated to some journalists -- looking for a more cosmic meaning -- as counter-Carter and anti-Jimmy. "When he calls Charles Kirbo (Jimmy Carter's friend and close adviser) a dumb bastard... Billy is striking at the royal court, coming as close as possible without hitting the king," writes Edwin Diamond, journalist and senior lecturer in political science at MIT, in the latest Esquire.

But Billy refuses to be shrinked in print. Some people may be trying to create a split with his brother, but they can't do it. "We love each other." As for the Esquire analysis, Billy Carter said innocently and with a wide grin, "I don't read dirty magazines, ma'am."

His voice gravelly from laryngitis, Billy -- who was notified that there was nothing but soft stuff at the reception's two bars -- whirled around and said, "I'm getting the hell out of here," and repaired to the downstairs Madison bar.

In the bar. nursing a something-and-orange-juice, Carter was surrounded by the Libyans, who broke into Arabic as he talked to the press who continued to trail him.

He supports the Libyans "because they're good people." ("When they gave him a saddle when he visited them, he broke down and cried," said one Libyan supporter. "He's not used to being treated so nice.") Carter feels the Libyans are getting a "bad rap" from the American press, who continually point out that the State Department has characterized Libya as a notorious supporter of international terrorism. Terrorists who killed members of the 1972 Israeli Olympic team were welcomed in Libya. An excited Libyan broke in and said, "No one writes that we signed the agreement last October" (that they would not harbor hijacking terrorists). Another shouted that "in 1978 the United States spent $3 billion, $105 million dollars worth for Libyan oil."

Billy Carter said, "I don't know nothing' about [foreign] policy. But they're my good friends. I invited some over to a softball game and they invited me to Libya. It's accomplished a lot. People in Atlanta, hell, they didn't even know where Libya was until they came over here.

Then the conversation switched to domestic issues with the appearance of New York Times columnist Bill Safire, who argues in print that Carter suffers his brother's public displays because Billy Carter could be a potentially damaging witness in the Justice Department's investigations of Bert Lance. He argues that Billy Carter may know "some curious Carter borrowings from the Lance bank."

As Billy Carter spied Safire in the haze of smoke in the bar, he shouted, "Is that Safire? He's full of s---." Safire said, "I want to tell you I appreciate your directness."

With the Arabs shouting to the press to back off, that Billy Carter was "here to relax," several minutes turned into a grilling of Carter by Safire over his financial transactions with Lance's National Bank of Georgia. A federal grand jury in Atlanta has been investigating Lance for the past year, and columnists and reporters have posed the question of whether the close friendship between Lance and Carter could have led to improprieties in the finances of the 1976 Carter presidential campaign or the Carter family peanut business.

Billy Carter said little more than he has said before. He had a personal loan from the bank. "I signed a note with NBG for $128,000 in case I needed it, but I only borrowed $52,000," and used it to make home improvements. He also said he made a different business transaction and "I signed a note with Carter farms to pay it back," but he mumbled his way through the specifics and amount.

However did want to clarify one point. He didn't mean to call Kirbo "the dumbest bastard I met in my life," but the "dumbest bastard in the peanut business."

With his voice fading from laryngitis and the Libyans shouting in Arabic and removing the press from Carter's side he rushed upstairs to make one final appearance of the evening.

Earlier, Carter had said 18 public appearances including "The Hollywood Squares" had been canceled "because of my friendship with the Libyans. But I hope to return there this spring."

And in a room jammed with his Libyan pals he drew a loud laugh when he cracked that the Libyans were "the best friends I got in the world right now."