Dr. James Dunbar Bell, 67, a retired foreign service officer who was a specialist on Southeast Asian affairs and a former Ambassador to Malaysia, died Saturday in a Santa Cruz, Calif., hospital. He had cancer.

Dr.Bell was named deputy chief of mission at the U.S. embassy in Indonesia in 1957, a job he held until appointed director of the Office of Southwest Pacific Affairs in the State Department three years later.

He served as ambassador to Malaysia from 1964 to 1969.These were the years of a build-up of the American military presence in Southeast Asia, and a time of strained relations between Malaysia and Indonesia.

Following his return from Malaysia, Dr. Bell spent a year as diplomat in residence at the University of California in Santa Curz before retiring in 1970.

He came to Washington in 1941 as an analyst with the Office of the Coordinator of Inter-American Affairs in 1941. He later served with the Justice Department before joining the foreign service in 1944.

In the 1940s and early 1950s, he was assigned to several posts in South America and the Philippines.

Dr. Bell was born in Lebanon, N.H. He graduated from the University of New Mexico and earned master's and doctoral degrees in international relations at the University of Chicago.

His first marriage, to the former Helen Foy Johnstone, ended in divorce in 1960.

He is survived by his second wife, Stephanie M., a son, Jeff M., and a daughter, Stephanie S., all of the home in Santa Cruz; two other sons, James D., of El Paso, Tex., and Christopher, of Providence, R.I.; another daughter, Diane E. Gilford, of Oberlin, Ohio and five grandchildren. CAPTION: Picture, 1966 Photo, JAMES DUNBAR BELL