Sam Nujoma, leader of the nationalist guerilla movement in Namibia, challenged South Africa today to hold "free and fair" elections under U.N. supervision and said his group would participate if it did.

In his first reaction to the South African-sponsored elections in Namibia last week, Nujoma told Western reporters here with Sen.George McGovern: "We are challenging the South African regime to allow such elections to take place."

The South African-sponsored elections, in which 81 percent of registered voters took part, were boycotted by Nujoma's Southwest African Peoples Organization (SWAPO) because the United Nations did not oversee the voting. Votes are still being counted from that election.

The SWAPO president said that if South Africa refuses to go ahead and allow U.N. supervised elections his Soviet-armed guerrillas the ready to wage a "protracted armed struggle" that he said would paralyze the economy of the South African-administered territory within two years.

Nujoma said SWAPO still supports the U.N. plan calling for up to 6,5000 U.N. troops in addition to 1,600 administrative personnel to ensure fair and free elections. South Africa has balked at this large a number of U.N. forces.

The SWAPO leader said his group would still agree to a "token" South African force to 1,500 troops being stationed in Nambia during the elections but insisted the U.N. forces also must be present.

He charged that the elections last week showed the "clear dishonesty and insincerity" of South Africa and its intention to create another homeland, or bantustan, similar to thos for blacks in white-ruled South Africa.

He also said he was "shocked" by Western press reports that the elections had been "genuine" and "fair". He said the South African announcement that 81 percent of registered Votters particiated was a "pure lie" and that many individuals were enrolled five or six times, or were dead, while those who voted were forced at gunpoint.

Since the elections, South African authorities have said they will try to persuade the newly elected constitutent assembly to accept participation in a second, U.N. supervised election early next year.