For a dark and magical moment today it was at least remotely possible that Norman Mailer was going to step before the literary lights of the world and slug Gu nter Grass right in the mug. And wouldn't that have been fun?

Indeed Mailer arrived at this week's 48th PEN International Writer's Congress with matching shiners, courtesy of an irreverent sparring partner at a local gym. But as president of American PEN, as a man of grizzled mien and snowy mane who has seen his own form of political and syntactic rebellion become a literary institution, Mailer is long past the days when he might amble up to a whinnying, complaining colleague such as Grass and blur his Weltanschauung with a crisp blow to the brow.

But the occasion did warrant conflict of a sort. Grass, and many other panelists discussing the theme of "How Does the State Imagine?" this morning at a midtown hotel were still mightily agitated that Secretary of State George Shultz had, at Mailer's invitation, addressed the more than 700 Parnassians who have convened here this week for discussion, gossip and, perhaps, a friendly rub of the relic.

After rendering his prepared speech to the panel in German, Grass, in semiperfect English, bellowed from beneath his Fuller brush mustache: "I think everyone is still in shock by the events of yesterday. I didn't feel comfortable flying from Europe to New York and the first thing I get is a lecture from Shultz on literature and freedom. Why weren't we able to speak out our protest?"

(Scattered applause. Much shuffling of papers.)

Grass then raised his indignation to a pitch so high only spaniels could hear him. "After all," he said, "this is not happening in Poland or Bulgaria or Cuba, but here in New York."

One half expected Mailer to bound up the aisle like a miniaturized version of Two-Ton Tony Galento and give the old Tin Drum a bang. But Mailer, who admits "I've always wanted to be president of something," was not about to lose his executive dignity. He walked calmly to the dais, sat down at a microphone next to Grass, and announced, "I think I've got to address that. It's irksome to be placed in the position of a man who would be a literary bureaucrat or commissar."

Mailer announced that he had, in fact, delivered the letter of protest signed by 66 prominent writers to Shultz. In fact he said he was heartened by Shultz's "surprisingly" liberal view of immigration restrictions on certain writers with past communist affiliations. Said Mailer, "I don't think he said anything just to charm me."

As he walked off the stage, Mailer winked at a friend. He climbed out of the psychic boxing ring victorious, cheery and scarred only by the battles of yesteryear.

Gu nter Grass is a distinguished author distinguished further by his status as a perennial Nobel Prize candidate. In that way he is like others here: Wole Soyinka of Nigeria, Vasko Popa of Yugoslavia, Nadine Gordimer of South Africa. You need a score card to count them.

But the prize seems to mean very little in these quarters. A couple of Nobel winners have arrived almost unnoticed. Czeslaw Milosz may have been the anonymous "Herb" of the Burger King ads for all the excitement he provoked in the Essex House lobby. Saul Bellow couldn't get into l'affaire Shultz at the New York Public Library Sunday because he had forgotten his printed invitation. The guards were unrelenting. And Claude Simon, the French practitioner of the "new novel" who won the award last year, walked into the Russian Tea Room today for a lunch given by Harper's magazine to, let us say, a restrained reception.

"Who's the guy in the bomber jacket?" said one magazine staffer.

"God knows," someone else said. "Make sure he's got an ID."

It is true. Celebrity plays an enormous role at such gatherings -- lit-crit types swarm to Susan Sontag like moths to a klieg light, the most poised of New Yorkers gawk at John Updike as he fairly glides along Central Park South -- and the principal sport played here is the squinting-at-the-name-tag game. It's a gas. Everyone wears plastic-coated name cards -- the same sort worn at IBM conventions: HI! I'm Albert Del Garbonzo of Altoona -- and everyone tries to catch a glance at who exactly is who.

After all, just what the hell does a Ryszard Kapuscinski look like? (Plain, balding.) Who's the bearded guy with the eye patch? (Robertson Davies.) Who's the writer with three bodyguards? (Omar Cabezas of Nicaragua.) And who's the young fellow with the tweed coat and the rotting sneakers? (Salman Rushdie, author of "Midnight's Children.") The tags make it a cinch.

At the Russian Tea Room lunch today the literary set established a "power table" that was reminiscent of the sort assembled by the political set at Maison Blanche or Duke Zeibert's. William Gass, William Gaddis (are they not the same person?), George Plimpton and Harper's editor Lewis Lapham lunched on the oddly breaded chop with a few of the agents-provocateurs of the book biz, Mort Janklow and Lynn Nesbitt.

Their meals, one might add, arrived before -- well before -- Claude Simon's. And that ain't chopped liver. It's power.

In the hotel lobby, Gay Talese, easily the best dressed of the lot, defended Mailer and suggested that it was George Shultz, not PEN's members, who had been "duped." Despite the acrimony, he said, the whole affair had been a grand success -- as well as farce.

"We had Shultz out of Washington, out of his realm, and in our realm: the library, the citadel of great literature. I don't believe the devil should ever be absent from even our most holy gatherings. If the state is the enemy, isn't it the role of the congress to know the enemy? Shultz was the one who was duped. We made our points with him far more than he made his with us."

Talese saved his anger for John Kenneth Galbraith, who had suggested Mailer invite Shultz in the first place. Sunday night, while Mailer defended himself, Galbraith honked a note of great remove and unerring charm. "I guess when you are that tall," Talese said, "you can stride above the fray. But if it's anyone's fault, it's Galbraith's."

Talese said that Mailer's celebrity, more than Shultz's politics, was the cause of all the mess. "You should remember that before Norman, we were an organization almost in love with being poor," Talese said. "He's made money, he's brought in publicity. For all his faults he's done incredibly well. In 1986, PEN won't have Norman Mailer to kick around anymore. Where will we be then?"

Two of the more eloquent speakers of the day were Nadine Gordimer and Amos Oz of Israel, both of whom objected to the idea of the imagination of the state.

"The state has no imagination," Gordimer said. "The state sees the imagination as something it can put into its service, while the writer is in service to his imagination's dictate . . . The state doesn't have imagination, it has fantasy. In South Africa it fantasizes the projection of a social order called democracy in which the majority of its population has no rights, no vote."

Oz, author of "In the Land of Israel," spoke on the need to distinguish between states. Ripping "do-gooders" and "the cowardice of the relatively decent societies in confusing themselves with the bloody ones," Oz said, "Let us not ascribe a demonic imagination to the state and an angelic one to ourselves as writers. We ought to be telling bad from worse from worst."

Updike addressed the topic in tones without too much gravitas, but rather in the ironic mode of his late colleague at The New Yorker, E.B. White. He said he found the connection between the state and the imagination embodied in the blue postal boxes of his childhood when he would send letters to famous writers and wait for their replies.

Even today, he said, "I never see a blue mailbox without a spark of wonder and gratitude."

To describe the perennial conflict between the state and the writer, Updike relied on a kind of sweet psychology: "The state, like a child, hopes that each day will be like the last. The artist, like a youth, hopes each day will bring him something new." It was lost on no one that, in Updike's equation, the writer is in a more mature stage of development than the state. Back in Washington will George Shultz agree?