"There was a joke about Mr. Arafat not being married," says Uri Avnery, an Israeli politician and journalist, who met with Yasser Arafat, leader of the Palestinian Liberation Organization July 3. "I said if he would marry an Israeli girl it would solve the whole problem. He said if it would solve the problem, he would do it that day."

By the time Avnery finished his unprecedented meeting with Arafat in West Beirut, and crossed back into East Beirut, Israeli officials were already considering charging Avnery with treason.

It amuses him.

"Bureaucrats who never served in the Army are accusing me of treason," says Avnery, sitting Thursday night in the Logan Circle apartment of someone he doesn't know, in a country he rarely visits. "It makes me smile." After all, Avnery himself took several machine gun bullets in the stomach in the 1948 war for Israel's independence, a war he didn't really want to fight in.

"Three," Avnery says of the number of bullets, the edge of his hand slicing across his middle to indicate where. "Want to have a look?"

In Israel, he is an ultra-leftist, an intellectual renegade who advocates a negotiated peace between Israel and the PLO and has maintained PLO contacts for the past eight years. His forum is a popular weekly magazine, Haolam Hazeh (This World), combining news, gossip, and a little sleaze. He also occupied a seat in the Knesset, the Israeli Parliament, from 1965 to 1974 and from 1979 to 1981, both times as a member of his own small party, Sheli.

He can be strident. On visiting the United States:

"It made me sick. I am sickened by the many people who were for peace in Vietnam, in El Salvador, and not in the one place where they could do something about it. They support a colonial government in an occupied territory . . . I came to awaken public opinion in America. A great change is taking place in the PLO."

On American Jews: "I think Jewish people, for the first time, are having their own thoughts. Jewish people in this country have been blindly for Israel. If the Israelis elected nine donkeys and one horse tomorrow, they'd blindly follow. This kind of totalitarian, blind obedience doesn't exist in Israel. In Israel, my visit with Arafat is debated . . . Here, you can't do that. People think they'll be accused of anti-Semitism."

On the Israelis: "The Israelis are basically unsophisticated people. Arafat didn't believe it. I told him this. The Arabs have this idea that Jews are very clever people. It's a misconception. Israelis are very unsophisticated people as far as politics are concerned."

On Israel: "Our greatest misfortune was that we were incredibly victorious in 1967."

On whether the PLO is terrorist: "Same as we were," says Avnery--a member of the Irgun, the extremist military group led by Menachem Begin in Israel's pre-independence period. He shrugged. "We were called terrorists. Begin was called terrorist. He hung British soldiers. It's immaterial. We're fighting a war, and each side employs what it has . . . If anyone had given the Palestinians minimum rights, terrorism would have stopped a long time ago."

His comments on terrorism drew outrage. "It's absolutely disgraceful," said the American Jewish Committee's Washington representative, Hyman Bookbinder. "I'm ashamed. It means some kind of legitimacy is attached to what the PLO has done over the years."

Israeli embassy press counselor Nachman Shai said coolly of the comparison between Israeli terrorism and PLO terrorism: "There's one slight difference. The so-called terrorist activities of Begin were not directed against civilians. They were directed against the British government. Not against 23 students in Ma'alot. Not against 34 people in a bus between Tel Aviv and Haifa. Not against a baby in his mother's arms on the seashore in Nahariyah."

But Avnery has a made a career of speaking for Israeli-Palestinian peace. He will tell you that he made 1,000 speeches in the Knesset--100 on the issue of Israeli-Palestinian peace--and has written 1,500 columns, 500 on this issue. "I've been called a traitor," says Avnery, with a smile. He is 58, tan, a striking man with thick white hair and beard, crease lines around blue eyes. He fled Nazi Germany as a young boy with his family and immigrated to what was then Palestine. He joined Menachem Begin's Irgun at the age of 14. "Mind you, I don't want to give the impression that I enjoy this," he says of the controversy he causes in Israel. "But I don't mind this."

He is hardly an isolated fanatic, he insists, as American friends gather around him and listen thoughtfully to what he says. Some of them are from the organizations that sponsored Avnery's visit: the New York-based Middle East Peace Project and the Illinois-based America-Israel Council for Israeli-Palestinian Peace.

"We are not an outside movement," he says of his party in Israel. "We are very much insiders." Even here, he has sympathizers. Journalist I.F. Stone introduced Avnery at a press conference Thursday morning at the National Press Club, saying that Avnery "has the courage to preserve the human face of the Palestinian people. We owe a great debt to that small band of Israelis who dare to speak up. We are not against Israel. We are for Israel's survival and Israel's survival depends upon peace."

Says Bookbinder: "I disapprove of what he's done. But I glory in the fact that there is freedom of speech in Israel. I don't deny him the right to do it. But Arafat does not deserve, does not merit this level of participation. In what Israel hopes is the final chapter in the eradication of the PLO influence in Lebanon, this act of going to Arafat gives an inaccurate impression that Israel is about to start dealing with him."

But Bookbinder calls the treason charges against Avnery "farfetched. I would hope Israel will not charge him with treason."

The Israeli embassy's Shai said a complaint was filed against Avnery and the police are investigating. "The major argument is that he met with an enemy of the state of Israel," said Shai.

But Avnery is excited about his 2 1/2-hour meeting with Arafat. In East Beirut, one phone call to a contact had produced Arafat's private unlisted phone number. The interview was then set up, and someone who knew Avnery met him at the border between east and west, escorting him safely across four armies--Lebanese, Phalangist, PLO, Syrian.

"The main thing is that it took place at all," he said at his Thursday press conference. "This is the first time Arafat has ever met with an Israeli. It's the first time Arafat has ever spoken to an Israeli except for some chance encounter with an Israeli Communist at some Communist congress."

Members of the press crammed into one small, stuffy room to listen to Avnery speak in his forceful, heavily accented English. He competed with outside construction noises and occasional whines from taping machines that had irritated I.F. Stone during his introduction.

He is convinced that Arafat is willing to have peace--citing Arafat's endorsement during the interview of a 1977 American-Soviet communique which calls for Israeli withdrawal from territory occupied in the Six Day War of 1967 and establishment there of an independent Palestinian state. (Both those conditions are unacceptable to the Israeli government.)

"Whether we like the PLO or not is immaterial," Avnery said, in shirtsleeves, hunched over a table in the front of the room. "Whether Yasser Arafat likes children or not is immaterial. This is the leadership of the Palestinians. Now, if you destroy Arafat, if Sharon kills all of the PLO in Lebanon, so what? The secondary leadership in Damascus would take over. Instead of having the PLO dominated by moderate forces, you will have one dominated by the most extreme, radical factions, connected to the Soviets. Now, I ask you, who wants that?"

Later, he speaks more of the catastrophic effect of wiping out the PLO in Lebanon: "It will turn hundreds and hundreds of young Palestinians into devoted revolutionaries of the Khomeini type or the Soviet type and you turn the Middle East into a hell."

Israeli officials are ready with responses. "Arafat hasn't recognized Israel," says the embassy's Shai, who points out that the PLO covenant does not accept a Jewish state. "He hasn't come to close to it. When Arafat came near it in the interview, Avnery was helping him."

Is Avnery pro-PLO?

"No," he says. "I'm pro-Israel, and because I'm pro-Israel, I feel we'll never have security unless we have peace, and we'll only have peace if we make a settlement with the Palestinians and we have to do that with the PLO. There's only one leadership organization that all Palestinians accept--as much as the Israelis are still trying to invent another."

Avnery first met with a PLO representative, Said Hamami, in 1974, in a London hotel. "Since then, I've had regular contact--sometimes daily." And Israelis knew about it, he says. "In 1976, now defense minister Ariel Sharon asked me to try and arrange a meeting between him and Arafat. He wanted to propose to Arafat that they kick the king out of Jordan and take it over. The proposal wasn't acceptable." The meeting, he says, never took place. At other times, he says, a high government official in a Labor government asked for oral reports on Avnery's meetings.

"If there is a trial," he says with a smile about his treason charges, "this will all come out."