"AMERICAN Picture Palaces," a 10- minute film that pays homage to movie theaters of the '20s and '30s, premieres Friday evening at 7 at the Circle Avalon. It offers colorful narration by Gene Kelly as he recalls the heyday, decline and rebirth of such palaces as the Oakland Paramount, the Atlanta Fox, the Wiltern in Los Angeles and New York's Radio City Music Hall. There's a chance that Kelly will be able to introduce the film in person.

The movie also features veteran organist Gaylord Carter, who accompanied silent films for many years. It will screen at no extra charge with every showing of White Nights through December 19.

The Avalon is, in its own right, worthy of note. Built in 1922, the construction forced the original seven owners into bankruptcy. Completed by Stanley-Kramer Theaters, the movie house operated as the Chevy Chase Theater until '39 when the name changed to Avalon. The owners later merged with Warner Brothers and later again, with RKO Pictures. The Pedas brothers, owners of the Circle Theaters, bought the Avalon in the fall of 1978 and last spring spent almost $250,000 renovating the 700-seat theater.

Plans are underway to renovate the smaller, 200-seat Avalon II, which is above the Avalon, sometime next year. Originally, the smaller Avalon was intended to be the balcony level of the larger theater.

The Circle Theaters are continuing an ambitious theater renovation plan. Work on the Embassy Theater on Florida Avenue in Northwest D.C. is nearly completed. Management also plans repairs at the Uptown after "Out of Africa" completes its expected eight- week run.

Very Special Arts, an educational affiliate of the Kennedy Center that sponsors art programs for youths and adults with mental and physical disabilities, will hold a benefit premiere of Out of Africa at the Uptown on December 19 at 7 p.m. The film stars Meryl Streep, Robert Redford and Klaus Brandauer, and is based on Danish author Isak Dinesen's novel about her life on a Kenyan coffee plantation at the beginning of this century.

Tickets to the film only on benefit night are $25; tickets to the film, a Danish Christmas supper with the Danish Ambassador and Mrs. Eigil Jorgensen at their home, and a chance to win a trip for two to Denmark are $150; and an additional $50 will put your name in the evening's program. For ticket information, call 332-6960.

"Out of Africa" will open the following night.

The Washington-based Council on International Nontheatrical Events (or CINE), winds up its 28th annual awards program on Friday with free screenings of nearly three dozen films made by non-professionals in five wide- ranging categories. From 9 a.m. until noon on Friday, the public is invited to watch independently produced non-feature movies in these categories: arts and animation; business and industry; children's and educational films; travel and documentaries; and sports. The films run from nine to 33 minutes.

They'll screen in five different locations in the Washington Plaza Hotel, at Thomas Circle, Vermont and Massachusetts avenues NW. Call 785-1136.

Star searching? You're apt to find Rex Harrison, Kirk Douglas, Brooke Shields, Jimmy Stewart, Mikhail Baryshnikov, Chevy Chase, and more luminaries at the Kennedy Center's Hall of States this Sunday evening as they begin arriving about 7 for the annual Kennedy Center Honors. Bring your own flashbulbs.

Iranian film director/producer Parviz Sayyad had to wait until his wife and children got out of Iran to show his latest work, The Mission, the story of a political assassin sent to New York City to kill a former government official under the Shah's regime. The thriller will be shown at the Biograph on Wednesday and Thursday at 6, 8 and 10. Admission is $5. Call 667-1188 or 333-2696.

SHORT SUBJECTS -- An education in high jinxs will be offered this Saturday at American University with two different 110-minute programs of Three Stooges shorts. Eric Kulberg, who was responsible for many of the old Wax Museum's rare and wonderful videos, has assembled the shorts from his private collection. The programs will screen in the Wechsler Theater in the Mary Graydon Center.

The first starts at 7 p.m. and includes Pardon My Scotch, Dizzy Doctors, From Nurse to Worse, You Natzy Spy and Micro-Phonies. The second program begins at 9 with five more shorts. Admission to each show is $4; $2.50 for AU students with ID. Call 885- 2040.

This Friday at noon the National Archives' free "War Film" series offers You'll Never Get Rich, made in 1942 and starring Fred Astaire.

Speaking of Astaire, he made his feature film debut with the Three Stooges. Disbelievers are encouraged to catch the 7 p.m. showing of Dancing Lady on Wednesday at the American Film Institute. The 1933 MGM comedy, which led Astaire to a seven-year contract with RKO, also features Joan Crawford, Clark Gable, Nelson Eddy and others.

This weekend's features at the Biograph's Truffaut festival are his 1976 tribute to children, Small Change, and his 1969 love story, Stolen Kisses, through Monday. Call 333- 2696 for showtimes.

Christmastime is Charles Dickens time. On Tuesday at 7, the Martin Luther King Memorial Library at 901 G Street NW features David Lean: A Self Portrait, a 59-minute documentary about Lean, considered one of the foremost translators of Dickens' work onto film. Call 727-1186 for details. Then, on Thursday evening at 7:30, Parts I & II of Dickens' Hard Times screen free in the Library of Congress' Mary Pickford Theater. The remaining two parts of the 1977 production, made by Granada Television of England, will be shown the following night at 7:30. Seating is limited to 64, so reservations are a must. Call 287-5677.

The Japan Information and Culture Center, 917 19th Street NW, offers screenings of a 28-minute film about architect Kisho Kurokawa at 12:30 on Monday and Tuesday, part of the continuing lunchtime series at the JICC. Call 775-0847.

Dance fans can look to Merce Cunningham, an hour-long documentary produced by London Weekend Television in 1979. Local dance critic Sali Ann Kriegsman will introduce the film at Monday's 8 p.m. screening in the Hirshhorn Museum's auditorium; $4 for members of the Smithsonian Resident Associate program, $5.50 for non-members. Call 357- 3030.