Fugitive arms dealer Frank E. Terpil offered up to $3,000 in 1976 to the late Kevin P. Mulcahy to deliver a handgun to Egypt for the murder of an opponent of Libyan ruler Muammar Qaddafi, according to newly released grand jury testimony by Mulcahy.

Mulcahy was to appear as a prosecution witness against Terpil and former CIA agent Edwin P. Wilson, whose murder conspiracy trial is scheduled to start today in U.S. District Court in Washington. Mulcahy's death last October at age 40 at a motel in the Shenandoah Mountains of Virginia was ruled the result of natural causes.

District Court Judge John H. Pratt granted a government request last month that the normally secret grand jury testimony be released for possible use against Wilson and Terpil.

Mulcahy, a onetime Wilson employe who testified in 1978 before a federal grand jury investigating Terpil and Wilson, said Terpil offered $2,500 to $3,000 if Mulcahy would "pick up a cold gun . . . and deliver it to a man in Cairo."

By "cold gun," Mulcahy testified, Terpil meant a weapon that had not been used in any criminal activity and that had had its serial numbers filed off.

"He Terpil was very thick with Muammar Qaddafi and he wanted to do a favor," Mulcahy told the grand jury. "Frank did a lot of favors for people overseas."

Mulcahy testified Terpil, a former CIA employe whom prosecutors have said was Wilson's partner in illicit arms dealing with Libya, said he would "give me a telephone number and I would call that number from the airport in Cairo" and a man would come to pick up the gun. Mulcahy, who testified he needed money for child-support payments at the time, said he refused the offer because the $3,000 figure was too low.

Both Terpil and Wilson were indicted by the grand jury two years ago on multiple charges, including murder conspiracy and conspiracy to solicit the murder of Umar Abdullah Muhayshi, a former Libyan government official who defected to Egypt. The alleged death plot was not carried out.

Jury selection was completed yesterday in the trial of Wilson on the two murder-conspiracy charges. Opening arguments are scheduled for this morning. Terpil, who fled the United States around the time of his indictment, is believed to be living in the Middle East.

Wilson, sentenced to 32 years in prison on arms and explosives-smuggling convictions in Virginia and Texas in recent months, faces up to 10 years' imprisonment if convicted here.

In his grand jury appearance, Mulcahy, a former CIA technician, testified Terpil had referred to Muhayshi as "a past official of the country of Libya who had left the country in -- in trouble with Qaddafi over leaving."

"And Terpil was going to have him assassinated with this gun?" a federal prosecutor asked, according to the grand jury transcript.

"As a favor to Qaddafi," Mulcahy responded.