NEW YORK, JAN. 20 -- The stars who showed up for tonight's third annual Rock and Roll Hall of Fame induction dinner at the Waldorf-Astoria were somewhat overshadowed by two conspicuous absentees, Paul McCartney and Diana Ross.

The Beatles were among the five inductees, along with Bob Dylan, the Beach Boys, the Drifters and the Supremes. But even though Motown founder Berry Gordy, a major figure in her career, was being inducted in the nonperformer category, Ross flew off to Europe, leaving no statement.

That was not the case with McCartney, who stayed in England but did release a terse statement: "I was keen to go and pick up my award but after 20 years, the Beatles still have some business differences which I hoped would have been settled by now. Unfortunately, they haven't been so I would feel like a complete hypocrite waving and smiling with them at a false reunion."

BothGeorge Harrison and Ringo Starr were at the ceremony, as were John Lennon's widow, Yoko Ono, and his two sons, Julian and Sean. When they all got up on stage, it wasn't the Fab Four but the Flustered Five, and Ringo quipped, "It's growing every day."

Harrison graciously downplayed McCartney's absence. "I don't have to say much because I'm the quiet Beatle," he began. "It's unfortunate Paul's not here because he's the one who had the speech in his pocket." Later, he quoted from the Beatles catalogue, saying, "It's wonderful to be here, it's certainly a thrill."

"I wish John was here," said Julian Lennon. "He would have been here. He would have come." At a reception before the dinner in the hotel ballroom, Yoko Ono had said, "It's very sad that he's not here."

McCartney's absence did inspire the night's one gonzo speech, by Mike Love of the Beach Boys. During that group's induction, Love rambled on about harmony and peace before calling the McCartney situation a "bummer" and challenging the Mop Tops to match the Beach Boys' 180-concert-a-year touring schedule. Love then threw down the gauntlet to Bruce Springsteen and Billy Joel to get up on the ballroom stage and jam and, finally, to Mick Jagger (who introduced the Beatles) and the Rolling Stones to share a concert stage with his band. Elton John, who had presented the Beach Boys with their award, stood on stage whistling after Love's rambling discourse, then walked off, mock-miffed and asking, "Why didn't he ... mention me?"

Little Richard was hard pressed to remember who he was introducing, sending greetings to Muhammad Ali ("Thank you for loving me, Muhammad!"), making a pitch for a star on the Hollywood Walk of Fame and occasionally remembering the Supremes, who, he said, "remind me of myself -- they dress like me and they do my holler."

Springsteen, dressed in the same silver suit he'd worn to last year's ceremony, had no such problem when he introduced Bob Dylan: "When I was a kid, his voice thrilled and scared me, made me feel irresponsibly innocent, and it still does ... He's a revolutionary. In the way that Elvis freed your body, Bob freed your mind. To this day, when great rock music is being made, it's in the shadow of Bob Dylan, over and over and over."

After a long standing ovation, Dylan said, "Thanks, Bruce," and added thanks to a number of people, including "Mike Love for not mentioning me. Peace, love and harmony is very important indeed, but so is forgiveness, and you've got to have that, too."

Ono and the Lennons shared a table with the two ex-Beatles, Bob Dylan, Billy Joel and his wife Christie Brinkley. They probably didn't have to pay for it, but the 700 in attendance, mostly from the record industry, paid $300 apiece, or $10,000 for a table. The money raised will go toward basic foundation expenses while the Rock and Roll Hall of Fame, to be located in Cleveland, continues its fund-raising activities. The audience was shown two slides of the model for the hall, designed by architect I.M. Pei.

AtlanticRecords' Ahmet Ertegun, a founder of the nonprofit foundation behind the Hall of Fame, insisted, "There's no rush" to complete and open the hall. However, foundation President Seymour Stein, the head of Sire Records, put it differently: "I'm in the record business, and we'd like for it to be a hit overnight." But only $7 million of an estimated $50 million that will be needed has been raised so far, and no work is expected before late 1990.

Stein expressed surprise "that some of the {inductees} aren't here. This is a lifetime achievement award, not an Academy Award or a Grammy for a particular record or song. This is the summation of someone's career, ongoing or complete."

One surprise inductee was Gordy, who has seldom appeared at public functions. "It's very strange because I'm usually behind the scenes," he said before the dinner. "It's a strange sensation. I can kind of feel what some of the stars go through -- the cameras, the lights, the questions. Hey, this is not so bad. Maybe I'll have to rethink things."

Supreme Mary Wilson, who wrote some unflattering things about Gordy and Motown -- as well as Diana Ross -- in her recent autobiography, said Gordy seemed to be avoiding her, but that "if we were inducted without him, it would have been wrong. We didn't do it alone; there were a lot of people behind us. He made not only us, but all the others. He gave us the opportunities."

Three pioneering artists were inducted into the Hall of Fame as early influences on rock 'n' roll: Woody Guthrie, the folk poet of the Great Depression; folk-blues legend Huddie (Leadbelly) Ledbetter; and jazz guitarist and technical innovator Les Paul.

"I don't want his music to die," said Leadbelly's niece, Tiny Robinson. "I want it to stay alive. It's a root and the tree is growing."

Looking out over the well-heeled crowd, Arlo Guthrie was typically irreverent. "I'm fairly positive if my dad were alive today, this is the one place he wouldn't be."

Les Paul, the only living pioneer and a major figure in the development of both electric guitar and advanced recording technology, admitted he'd been credited with "stumbling across a number of things you guys are using. You've had a lot of fun with my toys."

SeanLennon got off one of the night's best lines, saying, "I'm pretty proud to be up here today for doing nothing," to which Ringo added, "We're all doing nothing. Give us the prize and let's get on."

Nominees, chosen by a panel of record executives, producers and writers, had to have released their first records by 1962. And this year, because of personnel changes that affected many groups, the Hall of Fame began listing group members separately, which is why the Drifters were represented by all of their seven lead singers: Ben E. King, Rudy Lewis, Johnny Moore, Bill Pinckney, Clyde McPhatter, Gerhart Thrasher and Charley Thomas. It was the second induction for the late McPhatter, who made it in last year as a solo artist. The evening ended with the traditional jam featuring all inductees and inductors. Highlights included Dylan's "All Along the Watchtower," with Dylan and George Harrison chiming in on dual vocals after a long guitar intro by Les Paul, and "I Saw Her Standing There," with Harrison, Springsteen and Jagger on vocals, a band that included Neil Young, Nile Rodgers, Billy Joel, John Fogerty and Jeff Beck and a choir of assorted Platters and Beach Boys. The "Letterman" show's Paul Shaffer goaded everyone into a ragged but raucous set of representative classics, including "Barbara Ann," "Stop in the Name of Love," "Twist and Shout," "Satisfaction" and "Stand by Me," which it was impossible not to do on that crowded stage. When Dylan finished off the evening with a vibrant ensemble reading of "Like a Rolling Stone," the black-tie crowd was standing on its chairs and dancing with abandon.