"SAVAGE . . . senseless . . . cowardly . . . lawless - those are the right words for the latest atrocity committed by the terrorists of the Palestine Liberation Organization on innocent Israeli civilians last weekend. Within the limitations of any words to do so, they accurately define the act.And when Israeli Prime Minister Menachem Begin promises to "cut off the arm of evil" that threatens his people he is merely defining, in our view, the only realistic response immediately available to Israel. No thoughtful onlooker can be indifferent to that country's anger and anxiety - and grief. It is one thing to urge that the Israeli attacks launched into Lebanon yesterday be confined insofar as possible to military targets; that would certainly be our hope. But it would hardly be reasonable to expect Israel not to make urgent and forceful efforts to answer once again the challenge to Israeli security posed by the more fanatic elements in the Palestinian movement.

We doubt, however, that even those Israeli leaders and supporters who argue the case for quick and firm reprisals would contend that counterterrorism, however effectively conducted over the short haul, can make Israel secure over the longer term. That purpose can be served only by the peace process set in train at Jerusalem last year, maintained precariously in the intervening months, and due to be resumed in next week's critical encounter between Mr. Begin and President Carter at the White House. That is the real message from the massacre on the Israeli seacoast last Saturday and nobody knows it better, of course, than those who engineered it. This was not after all, the first time that the PLO's terrorists have struck at a moment when Israel was in the midst of negotiations that showed some promise of leading to settlements with its Arab neighbors, and it will almost certainly not be the last. This is, tragically, the PLO's own, grim and desperate way of acknowledging progress toward sanity and tranquillity in the Middle East.

The question, of course, is whether this brutal strategy of disruption will succeed. And the answer, we think, will depend on how well the message from last weekend's horror is understood, by Israelis as well as moderate Arabs who profess an interest in a so far, while mixed, are at least somewhat encouraging. Mr. Begin has chosen to see in the latest PLO raid strong reinforcement for his view that a Palestinian state with the PLO in command is unthinkable. That's fair enough; by any timetable that we can foresee, an independent Palestinian state of any sort is a long way down the road, and we doubt the Jordanians, the Saudi Arabians, and still less Egypt's President Sadat, would seriously want to see the likes of the PLO's Yasser Arafat in charge of it, however stout their public dedication to the Palestinian cause. For his part, Mr. Sadat was sensibly restrained yesterday in his comments on last weekend's "sad and tragic incident," saying that "anything against civilians I shall also condemn." Privately, if not quite so emphatically in public, both Israeli and Egyptian officials have seized upon the event as a powerful argument for a comprehensive Mideast settlement - though not, obviously, on the same terms. So it may be too much to expect that the PLO's murderous mission last weekend, and the heightened tension that has followed, will somehow give fresh impetus to the peace process. But the PLO's latest provocation should serve, at the very least, as a harsh reminder of what the alternative is to a renewed effort to exploit the breakthrough at Jerusalem. That effort can be started with Mr. Begin's visit to Washington. But the PLO raid is also a reminder that it will be ended successfully only with further concessions from both sides.