Arab reaction to the Palestinian terrorist attack in Israel was generally laudatory yesterday with even the state radio of usually conservative Saudi Arabia praising the "courageous operation."

The raid, which left at least 37 persons dead, "had a noble aim," Saudi radio said, "to let the world remember that the Palestinians do exist and that no peace talks will succeed without their participation."

Kuwait's minister of state, Abdel Aziz Hussein, said it was "completely natural that the Palestinian resistance pursue its operations within the occupied Arab territories."

In Jordan, two dailies, Al Akhbar and Al Rai, both government-controlled, said the raid took place because of Israeli stubbornness in "refusing to recognize the right to life of the Palestinian people." Al Akhbar said Israel was only reaping what it had sowed.

In Libya, which has supported Palestinian terrorist activities in the past, the official news agency praised the "heroic action" which, it said, had "destroyed the myths of the security, superiority and capacity of Israel to escape punishment."

The most restrained Arab reaction came from Egypt, whose leadership has been sharply at odds with the Palestine Liberation Organization since the PLO joined forces with militant Arab nations in efforts to undercut President Anwar Sadat's peace initiatives toward Israel.

Egyptian Deputy Foreign Minister Boutros Ghali, in Cairo's only official reaction to the terrorist attack, used the incident to publicly remind Israel of Egypt's conviction that "unless we find a solution to the Palestinian problem in all its aspects, we will have no peace in the Middle East."

Ghali, in a clear reference to predictions that Israel would launch a retalitory strike against Palestinian commandos, said, "I hope Israel will calculate its further steps before taking any action that may obstruct the peace efforts."

Although Israeli Prime Minister Menachem Begin had immediately sent a telegram of condolence to Sadat three weeks ago when a prominent Egyptian editor was killed by Arab terrorists in Cyprus, Sadat, as of late last night, had made no mention of the slayings in Israel.

In Moscow, Nobel Peace laureate Andrei Sakharov led a group of demonstrators, most of them Jewish, in a public protest of the raid and kremlin support for the PLO.

The demonstrators were jostled by several passers-by and placards were grabbed-from them.

Moscow Radio said propagandists were trying to use the commando "incident" to discredit the PLO.