As the August sun beat down on a small group of gray-haired men at Arlington National Cemetery yesterday, one of them stepped forward with a simple wreath inscribed with a single word: "Nuts!"

That was what Gen. Anthony C. McAuliffe reportedly said 35 years ago when a German commander demanded he surrender to a Nazi tank brigade that had surrounded his forces during the Battle of the Bulge.

Yesterday on an Arlington hillside a dozen men who had served with the general or simply admired his courage, gathered at his grave for a tribute.

"General McAuliffe was the airborne man's ideal of a trooper," said Stan Branowski, 59, a brewery worker from New Jersey who served under McAuliffe as a 22-year-old sergeant in World War II.

"We hope to make this an annual ceremony," said Branowski, who lost a leg during the Normandy Invasion which preceded the Battle of the Bulge. "Most of us here are really just a bunch of old soldiers who were forced to get out of the Army by our wives but never really left."

The men at yesterdays ceremony belong to the 450-member Allied Airborne Association and half came from New York and New Jersey. Several wore full military uniforms but all sported pale blue ribbons, official airborne color, which hung from military medallions.

McAuliffe's one word answer to the Nazi's "electrified the world," recalled Frank Juliano, 58, a retired New York City policeman who conducted yesterday's brief ceremony. Juliano recalled how two days after McAuliffe's legendary response, on Christmas Day 1944, American forces led by Gen. George S. Patton stormed Bastogne and defeated the Germans.

After Juliano's speech each of the men, solemnly laid a single pale blue carnation at McAuliffe's gravesite. A four-man color guard from Fort Myer stood impassively behind the general's small white head stone during the ceremony.

"I wanted to come down to Washington and pay my respects to my buddies," said George Morgan, 32, a pressman from Chester, Pa., who served with an airborne division in Vietnam 11 years ago and said he admired McAuliffe.

Frank Berridge, an Amtrak conductor from Philadelphia who served with the 82nd Airborne Division in the Battle of the Bulge, had mixed feelings yesterday. "I feel sad in many ways when I think of those days of the war" Berridge said, "but I'm happy to see my comrades who are still living." CAPTION: Picture, Bugler plays "Taps" in background at ceremony for Gen. Anthony McAuliffe. By James A. Parcell - The Washington Post