Mayor Wyeth Chandler yesterday offered a mediation proposal to break the stalemate in a sense fire and police strike, but labor officials derided the proposal and began speaking of a general strike.

Chandler appeared before the City Council and proposed that federal mediators be authorized to choose between either "the last best offers" made by the city or the ones by the fire and police unions. But he added that the strikers must return to work before mediation.

Under the mayor's plan, if the meditators were to choose the union offer, then a citywide referendum would be held to raise the local sales tax to fund the difference between the city's wage package and the unions' pay demands.

There was no immediate response from fire and police union leaders late yesterday. But Tommy Powell, president of the local AFL-CIO Labor Council, called Chandler's proposal "a farce that nobody would buy."

Powell said city voters would be unlikely to vote in favor of increasing the sales tax, which stands at 6 percent, and that fire and police pay should not be singled out as a referundum issue.

Powell also said labor leaders representing 35,000 workers in Memphis would meet tonight to consider steps toward a general strike.

"The Labor Council is supporting the fire and police unions in exchange or their promise that there will be no violence. They are keeping their promise," he said.

Powell said the labor leaders would discuss a proposal for all union members in the city to stay away from their jobs beginning Monday in support of the strikers.

"We don't want to call a general strike, but if Chandler wants to run the unions out of Memphis, then we'll hang separately or together."

Meanwhile yesterday:

A film festival of Elvis Presley movies was cancelled in compliance with a dusk-to-dawn curfew as thousands of Presley fans poured into the city in commemoration of the singer's death a year ago.

The Memphis Education Association, representing city teachers said its members will honor picket lines on school grounds when classe open today.

The executive board of the fire fighters' union turned a wildcat walkout by its members into an official strike after picketers were arrested overnight for violating the curfew.

Police reported that 44 firefighters and 22 police officers were arrested after nightfall, all on curfew violations. Those arrested were realeased on their own recognizance yesterday morning.

Otherwise, the city remained quiet, as 1,200 National Guard troops remained on duty at fire stations and police precincts in the fifth day of the city's civil emergency.

Before meeting with the City Council, Chandler had vowed to seek a withdrawal of recognition of the fire and police unions as bargaining agents. Significnatly, that issue was never raised as the mayor offered his mediation plan.

Police are seeking a one-year contract with a 7 percent wage increase retroactive to July 1.They have also demanded binding arbitration by federal officials.

Chandler had insisted on a two-year contract with a 6 percent wage increase in the first year, plus a slight increase in fringe benefits. The mayor has refused to consider binding arbitration.

The stalemate in fire union negotiations centers around overtime provisions. The fire fighters routinely work 24-hour shifts, and have demanded time and a half after eight hours of work. Chandler has turned thumbs down on that proposal.

A recent survey comparing working conditions of Memphis fire fighters and police officers with those in cities of similar size showed that Memphis ranks high in pay but low in fringe benefits.

Chandler, who is serving his second four-year term as mayor, was elected three years ago with solid support from the AFL-CIO.