The following story was censored by Israeli militay authorities.

The Lebanese village of Khiam, three miles from the Israeli border, reportedly fail to the Palestinians early today. Eyewitnesses said they saw scores of villagers carrying their belongings away from the town. There is an air of tension and increasing alert among Israeli forces all along the frontier.

The so-called "good fence" border crossing with Lebanon was closed to visitors from the Israeli side this morning for fear of random shelling from the Palestinians who now over look the fence, officials said. There seemed to be unusual traffic on the roads leading north.

A few wounded Lebanese crossed over the line for treatment during the day, but the usual number of Lebanese workers who cross daily to jobs in Israel failed to materialize.

The embattled Christians, whose forces include a sprinkling of Druze and Moslems as well, have been well armed and supplied by the Israelis and have even the benefit of Israeli artillery support from this side of the border, according to press reports. But they are reportedly exhausted and demoralized after a series of serious setbacks at the hands of the Palestinians in recent days.

Israeli officials say they still have no confirmation that Syrians are involved in the fighting but it is clear that the Syrians have allowed the Palestinians to make this new push and Israel now risks losing the buffer zone the Christians have been building for them along the border since last summer.

The Israelis have sworn not to allow the Palestinians to regain control of the border region from where they used to conduct raids against Israel before the Lebanese civil war. But if the Christians are decisively beaten here, or if the Palestinians cannot be persuaded to desist, then Israel may have to face the decision which Israel's leaders hope very much to avoid - either to intervene in force or lose the border region to hostile forces.

Israel's Chief of Staff, Gen. Mordechai Gur, expressed the prevailing opinion among Israeli leaders Tuesday when he said southern Lebanon was not yet Israeli's war and that the nation should not enslave itself to the concept of a "red line" by deliniating its whereabouts.

The Christians are not beaten yet but the view from atop the Israeli fort here overlooking the border reveals their difficulties. From here, the battlefield is spread out like a sandbox model. A broad valley reaches away to the north with the Christian strong holds of Qlaia and Marjayoun on the hills to the west of the valley. To the west, across the Litani river, is still higher ground that the Palestinians hold.

Directly across the valley on a hill to the east is Khiam, which reportedly fell to the Palestinians this morning. This means that the Christians now have Palestinians in front of them to the west and in back of them to the east on this side of the Hasbani River which used to mark the edge of clear Christian control.

Although there has been sporadic firing along the line this morning, it was unnaturally quiet here as if both sides were, for the moment, worn out. Except for a few armored cars running between the red roofed town of Marjayoun and Qlaia, its church silhouetted against the sky, there was little stirring.

No movement could be seen in Khiam. In between, Shepherds tended their sheep unmolested. Here in the Israeli town of Metulla, tourists celebrating the Passover holiday strolled unconcerned in the streets within sight of the Palestinian held town.

There were reports from Beirut today quoting the Palestinians as saying they have been heavily shelling Israeli artillery positions here. None of these shells, were seen here. Except for a few desultory rounds, very few shells ahve actually landed on Israeli territory.

Last week Christian forces began an offensive here that, in the early stages, seemed to be successfully rolling up Moslem villages all along the border. But this effort to expand Christian control soon provoked the strongest Palestinian counterattack yet seen in this area. By last week it was clear that the Christians were not only losing what they had recently gained but were being pushed back on all sides as well.

The border village connection with Israel began last spring and summer when the civil war in Lebanon isolated them from the north. The Israelis set up field clinics at three border crossings and have so far treated over 20,000 patients.

Lebanese were gradually allowed to cross into Israeli to shop, to sell their products and even to find jobs. The Israeli lent them agricultural experts arranged meetings with relatives among Israeli's Arab population and provided mobile post offices so that the Lebanese close to the border could use the Israeli post office service.

It has been widely reported that the Israeli provided military assistance as well. Today the Lebanese Christian forces are asking for even more help. "They are cutting us in order to reach your threats," a Lebanese Christian told an Israeli reporter recently. Although the Christians are well armed, they have neither the training nor the manpower to stand up to the kind of Palestinian counter attack they they began to experience last week end.