Under normal journalistic standards, the arrest of Abu Daoud in Paris on charges of masterminding the 1972 Palestinian terrorist attack on the Israeli Olympic team in Munich should have been front-page news in every paper in Beirut.

Abu Daoud is well-known in Beirut. He lives there, and during most of Lebanon's 19-month civil war he commanded Palestinian forces in a large segment of the city.

Yet because of the strict Lebanese censorship of any news of Palestinian activities, the only mention of his arrest came last Friday - two days after he had been freed by a French court and a full week after he was jailed. Moreover, his name was buried near the end of a short news item that appeared on the back page of the daily An Nahar.

Because of the news blackout on Palestinian activities - illustrated most vividly by the lack of coverage of Abu Daoud's arrest - Yassar Arafat has complained to other Arab states that Lebanese press censorship is aimed mainly at the Palestine Liberation Organization in violation of Arab League agreements.

Palestinian sources said here today that PLO chief Arafat threatened to demand an immediate meeting of Arab League information ministers if the censorship is not lifted.

While the Palestinians feel the censorship is aimed directly at them - a view that is, by a censor's own admission, at least partially true - foreign correspondents in Beirut find that it bars any balanced, accurate coverage of event in Lebanon today.

This story, for example, could not have passed through censorship even though all the information in it is now available elsewhere.

The censors will allow no identification of the factors in the civil war as right, or left, Moslem or Christian. To the censor, it was not even a civil war. The fighting was strictly between Lebanese and Palestinians - as if the largely Moslem Lebanese leftists who fought alongside the Palestinians never existed.

Beyond that, the censors bar stories that cast doubt on Lebanon's once again becoming the commercial hub of the Middle East. For example, a story I brought to the censor yesterday, on today's opening of the banks in Beirut, began:

"Lebanan is trying to regain its former position as the banking heart of the Middle East, but there are questions among experts as to whether international banks will return here [to Beirut] in the same strength they maintained before the war."

When the censor finished, the sentence read: "Lebanan is regaining its former position as the banking heart of the Middle East."

Cut out was any mention of bankers' doubts that peace and stability have really returned, despite the presence of a 30,000-man Syrian-dominated Arab peace force.The censor even deleted paragraphs dealing with the growing prominence of the Persian Gulf island nation of Bahrain as a banking center, that is threatening to take business that used to be Beirut's.

The censor started to cut - but then left in with a notation of "OK" in big red letters a sentence about a team of American experts from the Agency for International Development leaving the country after surveying Lebanon's recovery needs. Censored stories from Beirut today said the banks did open formally after being closed for about 10 months.

The censorship is under the direction of Col. Antoine Dahdah of the internal security police. The chief censor is Commissar Zehi Boustani, an urbane, sharply dressed, French-educated lawyer who says that he was once a newspaperman.

Talking to Boustani can be a Kafkaesque experience. During on visit, to his office in an old palace the lights went out in pitch blackness he explained what could and could not be written. His view of the war - that it was strictly between Palestinians and Lebanese and that the Palestinians must be driven from Lebanon - corresponds to the prty line of most Maronite Christians. Most independent observers hold a different view of the war - blaming it on political, social and economic inequities as well as on the presence of the Palestinians.

Boustani's Christian-rightist point of view is not surprising. Of about 20 censors, all but two are Christians.

The censors have their headquarters in an area of eastern Beirut that is still so dominated by Christians that Moslem taxi drivers will not go there. The office is a considerable distance from most of Beirut newspapers and most foreign correspondents' offices. Getting to the censors can entail a 45-minute drive through some of Beirut's worst traffic jams.

Copy can be left at an office in western Beirut, which is the course most reporters choose. But that means a wait of up to four hours to get it back. The censors say they will not come to western Beirut, which was controlled by Palestinians and mostly Moslem leftists during the fighting.

There is a charge of about $3 to get stories censored. The money is refunded if stories fail to pass. The censors are even willing to bill news organizations by the month, and the censorship charge is called an export tax. American radio and television networks have refused to pay the tax as a matter of principle.

Even the Information Ministry's national news bulletin - prepared in western Beirut - must be censored. The penalty for violating censorship can be jail or a fine. Censors have indicated that foreign correspondents will only be expelled.

Censorship affects all news gathered in Lebanon, whether it is printed there or not, and it kills what was the only open press in the Middle East. Beirut newspapers carried all shades of opinion in the Arab world and were valued by journalists and investors alike for the insights they provided to Middle East politics.

On Western bank official, who shifted from Lebanon during the fighting, speculated during an interview in Athens this month that press censorship could have a negative effect on attempts to lure business back to Beirut. He said that censorship carries the notion of instability - that a nation has something to hide.

While the Lebanese press was open, it was not free. Many of the papers were paid organs of a political party or an Arab nation. As such, they were an embarrassment to most Arab leaders, who keep tight reins on the press at home and do not like the idea of their internal squabbles bursting into print in Beirut.

It was the Arab leaders who insisted during summit conferences in October ending the Lebanese war that controls be placed on the press.

Although Arafat can complain to the Arab nations about censorship on news about Palestinians in Lebanon, there is little chance that his pleas will be heeded.

As a result, the PLO is trying to beat the censorship of foreign news reports on Palestinian activities from Beirut by beefing up its information efforts here and in Rome.

The PLO news service, WAFA, is the only news organization in Beirut allowed - under an agreement among Arab nations - to transmit uncensored news from Beirut.

But when censorship was announced early this year, WAFA, too, was blacked out. Mysteriously, all PLO Telex machines stopped working. It took a week to discover the cause - a smashed cable that has now been repaired.