Scientists at the National Institutes of Health laboratories in Bethesda last year subjected more than 700,000 animals to experiments designed to help solve medical problems ranging from treatment of allergies to a cure for cancer.

A Washington-based group called People for the Ethical Treatrment of Animals (PETA), formed last September, believes the research is cruel and should be stopped. The members rallied 80 protesters on the grounds of the Bethesda institute last week to make their point on World Day for Laboratory Animals.

PETA singled out the NIH labs because they perform more experiments on animals than any other government institution and, in addition, raise animals for several privately owned laboratories. It was the first time in NIH's 50-year history that animal lovers had demonstrated on the Bethesda campus.

The organization "is against any experimentation that harms animals," said Alex Pacheco, 22, a junior at George Washington University and chairman of PETA.

Before a hushed audience, Pacheco read descriptions of nine research projects sponsored by NIH.

"In fatal, neuropsychology experiments, researchers removed the unborn fetuses from pregnant monkeys, surgically destroyed part of the fetuses' brains or amputated arms and legs, and then replaced the fetuses in the mothers. The surviving paralyzed and amputee infants were observed for up to two years before being killed," he read.

Dr. Robert Whitney Jr., chief of the Veterinary Resources Branch at NIH, argued that many of the experiments Pacheco described are no longer being performed.

"Anyone that would say there isn't wrong in the field of vivisection (experimentation on live animals) is wrong . . . There are some (experiments) that just aren't justifiable," added Whitney, who was NIH's spokesman at the rally.

"There are two questions involved here: are the animals being treated properly, and is it ethical to test on an animal . . . I think we (NIH) do a good job of taking care of the animals . . . the ethical question is one that for himself," he said.

After the rally, Whitney gave reporters a tour of the Veterinary Resources Branch.

The buildings house laboratorybred hairless mice, purebred fox hounds (NIH breeds approximately 1,000 annually), pigs being tested for hypertension and rats raised in sterile enviroments.

Whitney praised NIH advances in developing laboratory animals with genetic disorders.

"We can now make just about any combination of genetic disorders . . . If you want a rat with obesity, diabetes and hypertension, we can make you one," he said.

Whitney stressed that biomedical research often produces positive breakthroughs in other areas of medicine.

NIH's 700-acre farm in Poolesville is used to breed larger animals to produce antibodies against disease processes. The farm has approximately six horses, 150 burros, 400 sheep and 400 goats. Animals used in research in the Bethesda laboratories include dogs, cats, rabbits, ferrets, hamsters and primates as well as rats and mice. The NIH budget for fiscal 1981 was $3.6 billion; for 1982 it is $3.9 billion.

Protesters at last week's rally included D.C. resident Elliott Jones, the widow of Dr. Michael Halberstam, who was murdered during a robbery at their home last December. Jones said she believes vivisection "is just unnecessary, there's too much of it taking place."

One of the youngest demonstrators was Francesca Fitchett, 10, of Bethesda, who came to the rally with her sister Mercedes, 11, and her pet bunny, Bustie.

Francesca was 9 when she first found out about chemical testing on live animals.

"They were putting needles in the rabbits' eyes . . . I didn't believe they were doing this to the animals. . . . I felt very sad when I heard about it," she explained, while clutching her 7-year-old rabbit.

The Draize test to which she referred is performed by repeatedly dropping cosmetics, pesticides or other chemicals in rabbits' eyes to test the chemicals for properties of irritancy.

A few scientists in knee-length white coats came out of their laboratories to listen to the speakers at Friday's rally.

One supervisor of small-animal care, who asked not to be identified, said the animals "suffer because we inject them with diseases, but that's the purpose of the experiments -- for them to develop diseases. That's the only way we're going to find out about human diseases."

PETA members argue that one species' reaction in an experiment is not necessarily the way another species of a different physiology will react.

The group also supports the proposed Research Modernization Act, now before Congress, which would allot 30 to 50 percent of money that now goes into live-animal research to establishment of a National Center for Alternative Research.

Whitney cited what he believes is a basic difference between the protesters and the scientists who perform experiments on live animals.

"Alex and his people (PETA) believe animals have the same rights as we (humans) do, and I just don't believe that," he said.