For a man whose every ailment is watched with great intensity by world leaders and his fellow countrymen, Yugolsavia's President Tito looked remarkably fit today as he celebrated his 85th birthday.

Despite suffering from a serious liver illness last year and undergoing continued treatment for a back ailment, Tito did a full day's work and attended a festival where some 60,000 of his countrymen honored him. Tito and his wife, Jovanka, attended the hour-long program of dancing, music and gymnastics in Yugoslav stadium.

Other demonstrations and exhibitions to mark the event - as well as the 40th anniversary of Tito's assumption of the leadership of the Yugoslav Communist Party, were held throughout Yugolavia.

During the past few days, a stream of honors and accolades have been showered on Tito from Yugoslavia and abroad. He has been called "one of the great personalities of our time" by the veteran U.S. diplomat Averell Harriman, and "an undogmatic, creative genius" by his wartime colleague, the Croat leader Vladimir Bakaric.

Already festooned with medals, he has been made a National Hero by the Yugoslav Parliament for the third time and awarded the Order of the Great October Socialist Revolution by the Soviet Union. Countless newspaper and magazine articles have been devoted to his life, and the first copies of his collected works are rolling off the presses. The tickers of the official Yugoslav news agency, Tanjug have been spewing out birthday greetings from all over the world.

It is a tribute to Tito, that his own personality has not been entirely obscured by the Mass adulation. During the war, he received the nickname Stari (the old man) from his young lieutenants who formed the core of the partisan brigades that eventually drove the Germans out of Yugoslavia.

More than three decades later, Tito remains the Stari - the patrich who is at the same time loved and feared by his followers: loved anbecause of his warmth and humaniy, feared because of his sudden bursts of temper that effectively put an end to any argument.

Something of Tito's character is reflected in an exhibition of photographs currently on display in Belgrade. Many show him greeting foreign politicians - men like Ho Chi Ming, Nehru, and De Gaulle - and are a remainder of the fact that he is the sole survivor of thewartime generation of world leaders.

Others catch him in informal moments: looking at his watch obviously bored, having his hair cut, going hunting (still his favorite sport), noding off to sleep in the middle of a meeting. Little bunches of giggling schoolgirls in jeans gather around each picture, blow bubblegum and wander on.

"This is what marks Tito apart from other Communist politicians," an observer remarked. "If this were Brezhnev of Ceausecu, only a certain type of officially approved picture would be displayed and schoolchildren would be marched past in uniform. It's true there is a personality cult here - but it's a much more human cult than you find elsewhere in Eastern Europe."

The exhibition also shows Tito's unashamed love of the good things in life. There is a picture of him looking resplendent in a superbly cut marshal's uniform, complete with gold braid, meeting a dowdy Winston Churchill dressed in a baggy white suit. At the time - 1944 - Churchill was Prime Minister of Britain and Tito the leader of a band of scruffy ruffians trekking through the Yugoslav mountains.

A favorite anecdote about Tito tells of how, as a young revolutionary in Vienna, he set his heart on owning a Mercedes of the kind he had seen in the street. Today, as the President of Yugoslavia, he has not just one Mercedes but a whole fleet not to mention of villas and official residences scattered throughout Yugoslavia.

The common thread running through Tito's career from Communist agitator to international statesman is his genius for power and survival. Personally involved in many historic upheavals - the Soviet Revolution, Stalin's purges, World War II 2, the break with the Soviet Union - he has always managed to emerge not only unscathed, but with his position enhanced.

As he celebrates his 85th birthday, Tito can look back on some very real achievements. Under his leadership, Yugoslavia's Communist Party has grown frok a tiny faction-ridden organization to the ruling party with more than 1.5 million members.

Yugoslavia itself - before the war a royal dictatorship in which all the key positions were held by Serbs - has become a multinational state based on the principle of complete equality between six constituents republics.

While deeply rooted national grievances have not vanished entirely, they have been defused in a manner that would have been thought impossible by anybody familiar with the bitterness and hatreds of prewar Yugoslavia.

In ideology, Yugoslavia has been the scene of a unique social experiment in what sounds like a contradiction in terms: free-market socialism. Many problems have been encountered in putting the idea of workers' self-management into practice, but the attempt itself has been fascinating.

Finally, there is Tito's role as the first Communist leader to take on the Soviet Union and get away with it. Yugoslavia's successful defiance of Stalin in 1948 set a precedent for other Eastern European Nations that wished to decide their own political future. More recently, it has set an example for the Euro-Communists, who also insist on their independence from Moscow.

Fakaric, the Croat leader and long-time associate of Tito, used today's birthday celebration to say that independence from Moscow by Western European Communist countries is not a betrayal of socialism. He then made what observers called an unusually warm endorsement of the policies of Communist parties of Italy, Spain and France.

Perhaps most important, Tito has succeeded in creating a Communist state that enjoys widespread popular support. Yugoslavs enjoy a degree of personal freedom unknown in any other Communist country. With a few notable exceptions, they are free to travel abroad, read foreign newspapers and work where they please. They are also among the most determined consumers in the world.

All may be Red in Yugoslavia, but not necessarily rosy. According to the latest statistics, 502 persons are in prison for "political crimes," most prominent among them the veteran dissident and author Mihajlo Mihajlov.

There had been talk of announcing an amnesty, to include pardons for a number of political prisoners, just befor Tito's birthday. It was to have been a gesture of strength by the Yugoslav leadership, a sign that the nation is strong enough to relax its laws on political crimes.

Although sources say the talk of amnesty began before the inauguration of President Carter, who along with other Western leaders has put emphasis on human rights, it was decided that instead of being a sign of strength amnesty would be interpreted as giving in to Western pressure and a sign to weakness.

Consequently, senior Yugoslav Communist party officials let it be known quietly that there will be no amnesty until late this year.

At one of the many turning points in Tito's fortunes during the war, the German high command described him as a "dangerous bandit" and offered 100,000 reichmarks for his capture, dead or alive.

A sallow-faced picture of Tito was captioned: "This criminal has put it into his head that he is called upon to free the people and establish a Soviet republic. He has thrown the country into its biggest disaster ever."

A generation later, both the criminal and his "Soviet republic" are in excellent health.