Two Cuban Americans testified yesterday that former CIA operative Edwin P. Wilson offered $1 million for the 1976 assassination of a Libyan defector in what a prosecutor called "a short [story], a simple one, but an ugly one nonetheless."

Wilson, 54, twice convicted on arms and explosives smuggling charges involving Libya, went on trial in U.S. District Court in Washington on two murder conspiracy counts in connection with the alleged murder plot. A codefendant, arms merchant Francis E. Terpil, is a fugitive.

Both prosecution witnesses, Raphael Quintero of Miami and Raoul Villaverde of Vero Beach, Fla., said they were veterans of the 1961 Bay of Pigs invasion and had met Wilson during preparations for that abortive CIA operation. A third Cuban American, Villaverde's brother Raphael, who also was allegedly recruited for the death plot by Wilson, died in a boat accident in March 1980.

Defense lawyer Patrick Wall insisted Wilson was innocent. "Much of the story is so, but changed in critical aspects to make Ed Wilson look guilty," Wall told the jury.

Quintero, 42, said he was led to believe, during an August 1976 meeting with Wilson and Terpil in a Crystal City parking lot, that the target of the planned assassination was a notorious international terrorist, Carlos Ramirez Sanchez.

Quintero said he and Raphael Villaverde learned during a meeting the next month with Wilson and Terpil in Geneva, however, the target would be Umar Abdullah Muhayshi, a former Libyan official turned critic of Libyan ruler Col. Muammar Qaddafi.

Prosecutors have said in Wilson's two earlier trials that Wilson and Terpil held contracts worth millions to supply illicit arms and explosives and terrorist training to Qaddafi's military forces in Benghazi, Libya.

In Geneva, Quintero said, Wilson and Terpil offered Raoul Villaverde a $100,000-a-year post teaching Libyan terrorists to use explosives. Raoul Villaverde testified he refused the offer, because "I wouldn't work with no S.O.B. communists."

Quintero testified that all three men returned from Geneva the next day after deciding the assassination plot lacked CIA approval.

Quintero told the jury he later contacted Thomas Clines, whom he identified as the former CIA case officer for both himself and Wilson, and passed on details of the alleged plot. "I reported everything, the whole conversation," he testified.

The alleged plot was never carried out.

During cross-examination, defense lawyer Wall stressed that Wilson showed more interest in hiring an explosives expert than in the alleged murder plot. Wall also questioned Quintero repeatedly on why he hadn't asked more questions of Terpil about the identity of the assassination victim.

"I had complete trust." Quintero said. "He was a professional and a good businessman."