A headline on a story in yesterday's business section incorrectly implied that Westinghouse Electric Corp. has presented all of its evidence in a case involving its failure to honor uranium supply contracts with several utilities. Westinghouse has completed only the portion of its defense relating to an international uranium cartel.

Less than a week before Secretary of State Cyrus R. Vance leaves for South America, the State Department has recommended that a license it held up for 19 months be granted to export nuclear fuel for Brazil's first atomic power plant.

The recommendation yesterday took most nuclear observers by surprise, partly because the State Department had given no signal it was coming and partly because it is one of the few nuclear fuel export licenses the State Department has acted on since the Carter administration came to power 10 months ago.

Still pending State Department approval are 32 licenses to export nuclear fuel to 12 countries. A few of the export applications are almost two years old. The countries involved include Mexico, Belgium, France, West Germany, Japan, Sweden, Spain. The Netherlands, Yugoslavia, India, Switzerland and South Korea.

Observer saw the State Department move as an offer of the olive branch to Brazil on the eve of Vance's trip to South AMerica next week. Vance is to leave Monday for Argentina, go to Brazil Tuesday and Venezuela Wednesday. The State Department's refusal to grant nuclear fuel export license had been a major issue in Brazil, crossing party lines and uniting most of the country against the United States.

So strained were relations between the United States and Brazil over the nuclear fuel issue that when Deputy Secretary of State Warren Christopher went to Brazil last winter he was snubbed by Brazilian diplomats. One minister canceled an appointment he had with Chistopher, who, on his way back to the United States, went to the airport in Brazil without the customary displomatic escort.

The export license involved is for uranium fuel to be used at a 626,000-kilowatt plant for Angra dos Reis, 120 miles southwest of Rio de Janeiro. The license application came in April, 1976, from Westinghouse Electric Corp. to the State Department in the same month it recieved it.

o the State Department in the same month it receivedit.

State held up the license because Brazil has not signed the Non-Proliferation Treaty prohibiting the spread of nuclear weapons and because Brazil contracted with West Germany for a factory to reprocess plutonium from spent uranium fuel. The keystone of the Carter administration's policy on the spread of nuclear weapons is against the extraction and use of plutonium because it can be used to make nuclear weapons.

At least some observers see the granting of the export license as a concession by the United State to get Brazil to start talking about its plans for the plutonium factory that will be built for it by West Germany.

The United States has long given up on the idea that it might stop construction of the plutonium plant. What it wants to do now is to get Brazil to turn the plutonium plant into a "regional" reprocessing factory for spent fuel coming from atomic plants all over South America, including Argentina.

Other observers think that a continued refusal to grant the export license would pose an acute embarrassment for the United States. The Angra plant the uranium is bound for is Brazil's first nuclear power plant. It is expected to be ready to load the fuel next July and to begin generating electricity from it in September or October. [TEXT OMMITTED FROM SOURCE] plant's construction and for the purchase of the Brazil from the U.S. Export-Import Bank for the [TEXT OMMITTED FROM SOURCE]

There is also the matter of a $200 million loan to fuel.

State's recommendation that the Brazilian export license be granted does not automatically mean it will be. The Nuclear Regulatory Commission still must act on it before the uranium fuel is exported. An estimated 114,000 pounds of uranium worth more than $20 million is involved.