It was a fine sunny day for a parade - flags and laundry flew from the rooftops and the Sunday crowd cheered as the troops marched to a Sea Scout Band's rousing music.

Candy and sandwiches were on sale. The boys looked longingly at the pretty girls. The youngest children played on the jungle gym or tussled on the ground when the speakers talked too long.

Elsewhere it could have been a country fair - but it wasn't for this is a special town and the parade was to mark a special occasion.

Celebrating martyrdom is a long-established custom in the middle East - and Damour has a special importance for the Marxist Popular Front for the Liberation of Palestine, which was marking its 10th birthday.

In January 1976, Damour, a Christian enclave of 15,000 inhabitants 10 miles south of Beirut, was overrun by Palestinian and Lebanese leftist troops in retaliation for the razing by rightist Christian forces of a Moslem slum in the capital called Karantina.

Hundreds of Christians were killed - many of them civilians. The town was set on fire, then looted.

Its new inhabitants include victims of Karantina and of the Palestinian refugee camp at Tal Zaatar, another enclave in Christian territory which fell to rigtist troops in August 1976, after a long siege.

Today the parade wound up and down narrow hilly streets of this seaside town, past abandoned sandbag positions, roofless houses and untended banana plantations.

A single jeepload of adolescent warriors was all there was to recall the war. They struck poses with a rocket launcher, ammunition and mounted Dashka heavy machine gun that came to symbolize the fighting.

The only disruption the Kalashnikov-carrying soldiers caused was to delay Sunday drivers for a half four as the parade marched down the main coastal highway.

On a playing field near a Catholic church, the speakers harangued the crowd after a minute of silence to honor their martyrs.

The themes were familiar "relection front" material - President Carter was trying to make peace "at our expense," Egyptian President Anwar Sadat was a "traitor who will be punished," "no negotiations," and "people's war" was necessary to win back all of Palestine.

Pleased by the recent formal endorsement of the hardline theses by moderate elements of the Palestine Liberation Organization, the orators insisted that "the Palestinian movement is more unified than ever before."

What if Sadat signs a separate peace with Israel, the main speaker, popular Front spokesman Bassam Abu Sharif, was asked. Conditions would be "more difficult," he said, but we would "continue the struggle" by attempting to polarize Arab "progressives" against Arab "reationaries" as a necessary stage before Israel itself could be toppled.

Could more Arab "betrayals" - as the guerillas call Sadat's undertakings - be expected?

"Yes, we expect the reactionaries to move against us," he said. "We hope we will be ready for them."

By this time the loudspeaker system had failed and the orator was using a weak bulhorn.

The crowd had thinned greatly in any case - perhaps because it knew the themes by heart.

When the meeting ended, however, the smallest children lined up in military fashion and marched off stiff-legged under the guidance of an adult guerilla.

The Popular Front believes that it may take as long as 20 years to achieve its objective of destroying what it calls the "racist" Jewish state of Israel and replacing it with a "democratic" government grouping Jews and Arabs.

On the way out of town, children played with "Kalashnikovs" made out of wooden slats.