Lillie Smith was shouting from a folding chair set up on the sidewalk at 16th and K streets NW yesterday, just one block from the Soviet Embassy, urging Mikhail Gorbachev to hang tough during human rights discussions with President Reagan.

"Russia is telling the truth about social justice in America," said Smith, a 62-year-old Los Angeles native who says she has been homeless for eight years.

Some people thought Smith was funny, just another oddball sideshow in a city undergoing a Kremlinesque transformation for the arrival of Moscow's head honcho.

Others, however, thought it was time to take the summit to the streets, and they confronted Smith with charges that she was a communist and said that she should love America or leave it.

"Why don't you just get outta here and go earn a living for yourself?" said a woman who appeared to be of Central American origin.

"Did you know," Smith continued unfazed, "that there are some white neighborhoods which I cannot go into without being harassed, if not shot at, by police?"

"Aw, come on," the woman said incredulously.

Ahid Hamed of Iran overheard this exchange and joined in.

"They just got off the boat," he consoled Smith. "They don't know what's going on."

As a small crowd gathered, Smith cut her eye toward this reporter and winked. "Now I'm going to get loud and ugly . . . . "

And so she did.

"Tell Gorby to make no concessions!" she said forcefully. "I am sick and tired of this hypocritical nation always demanding from others what it will not do itself!"

Suddenly, her audience was gone. Except for a homeless wino who could barely stand as he read her protest signs.

"Am I reading this right?" he slurred. "Even a sparrow does not fall from the sky without God noticing, but here in America, elderly women and children die on the streets without anyone paying attention."

"Now that's beautiful," he said. "Sad, but beautiful."

Smith said she had lived on the streets and in a van. About a month ago, she decided to drive to Washington and make a case for homelessness as a violation of human rights.

"We always say that the true measure of a society is how it treats the old and the young," Smith said. "By that standard, America can be called an Evil Empire, too."

Smith said that in a democracy that prides itself on freedom of speech, she has had one heck of a time speaking freely.

She says she has been cursed by passers-by because of her views and that a man followed her during a protest walk along 16th Street, positioning himself in front of her signs so that no one could read them.

She said she was upset because on Sunday unidentified security personnel prevented her from entering the Ellipse, where Jewish organizations staged a human rights rally. However, Smith added, many of the Jewish protesters who saw her signs nodded approval, and some even went over to shake her hand.

When asked by a passer-by if she thought that her protest would make any difference, Smith burst out in a hearty laugh.

"Let me educate you," she began. "I know Reagan. I'm from California. All he does is eat jelly beans and ride horses. These so-called negotiations have been worked out in advance, by his so-called advisers. The summit is over. Gorbachev is here because it's party time, with ceremonies and media puffery.

"My only regret is that more street people do not understand that here is an opportunity for them to air their grievances. But I can understand that, because most of them are in oblivion," Smith said.

"Still, how can human rights in Russia be on the agenda and homelessness in America not be?"

Asked why she would try to embarrass the United States in front of the Soviets, Smith laughed again.

"I love this country," she said. "That's why I must tell the truth. What kind of country lets old people die on the streets? I have seen it. I am living it, but I refuse to go gently into that dark night."