President Carter defended his younger brother, Billy, against charges of anti-Semitism yesterday and asserted that his brother is "seriously ill at this point."

In an extraordinary, nationally televised display of brotherly solidarity, the president told a news conference that he would "disassociate" himself from some of Billy Carter's remarks but would not condemn his brother, saying, "I love him."

However, his assertion that Billy Carter is "seriously ill" was immediately challenged by the younger Carter's physician, who said Billy is "doing very well" in recovering from an attack of bronchitis.

With obvious emotion that appeared to bring him close to tears, the president said in response to a question:

"I know Billy and have known him since he was born, and I know for a fact that he is not anti-Semitic and has never made a serious, critical remark against Jews or other people in our country. To the extent that any of his remarks might be interpreted as such, I certainly do not agree and do not associate myself with them.

"Billy is my brother," the president continued. "He is seriously ill at this point. I love him. I have no intention of alleging to him any condemnation that I don't think is warranted, and I would say that I disassociate myself and my brother, Billy, from any allegations of remarks that might be anti-Semitic in nature."

It was the first time that the president has publicly commented on the recent, well-publicized exploits of his brother, which have brought sharp criticism from American Jewish groups.

In recent months, Billy has escorted representatives of Libya, the most radical of Arab states, around his native Georgia, commenting that "there's a hell of a lot more Arabians than there is Jews." Later, told remarks such as that had provoked criticism from Jewish groups, he retorted, "They can kiss my -- as far as I'm concerned."

Last week Billy Carter was admitted to Sumter County Hospital in Americus, Ga., for what his physician, Dr. Paul C. Broun, said was bronchitis.

However, it was not clear yesterday whether the president was referring to that affliction, or to his younger brother's heavy drinking habit and emotional condition, when he described Billy as "seriously ill." White House press secretary Jody Powell refused to elaborate on the president's statement.

In a telephone interview yesterday, Broun disagreed that Billy Carter is seriously ill.

"Seriously ill means it could lead to his demise," Broun said. "That's not true with Billy. I wouldnht classify it as 'seriously ill.' It is perhaps an acute illness."

Broun said that Billy Carter is "recuperating faster than expected" and that he had recently given that same assessment to the president's White House physician, Dr. William Lukash.

After answering the question about his brother, the president was visibly relieved to turn his attention to other questions at the news conference. On other topics, he:

For the first time, openly, although carefully, opposed the call of California Gov. Edmund G. (Jerry) Brown Jr. for a constitutional amendment requiring a balanced federal budget. Carter said the issue should not be resolved "though a very restrictive constitutional amendment." Earlier, he had opposed Brown's suggestion that a constitutional convention be convened to pass such an amendment, but not the proposed amendment itself.

Described as "counterproductive" some aspects of the demonstrations by farmers in Washington and said he "deplored" the damage done to the city in the demonstrations. The president defended the right of the farmers to demonstrate peacefully, but said he sees "no possibility" that they will gain the kind of higher price supports they are seeking.

Sidestepped a question on why Treasury Secretary W. Michael Blumenthal is in Peking discussing trade matters with the Chinese despite U.S. protests over the Chinese invasion of Vietnam, when last year the United States delayed the sale of oil drilling equipment to the Soviet Union to protest Soviet treatment of dissidents. Carter said the two cases are "completely different" and that Blumenthal's mission is "proper and well advised."

The president also defended his general conduct of foreign policy against charges of weakness and uncertainty.

Calling his policy the "exercise of prudence," Carter said he will not be pushed into intervention in conflicts elsewhere in the world.

"I have no intention of making these foolish decisions and taking foolish action to the detriment of our nation just to assuage some who criticize me because we have not become actively involved in these kinds of circumstances."

To a question of "who lost Iran," he replied:

"It is obvious that Iran was not ours to lose in the first place. We don't own Iran and we have never had any intention or ability to control the internal affairs of Iran... I don't know of anything we could have done to prevent the very complicated social and religious and political interrelationships from occurring in Iran in the change of government. And we will just have to make the best of it."