Austrian Chancellor Bruno Kreisky defended his weekend meeting with Palestinian leader Yasser Arafat today as Isreal's parliament, in a rare display of unity, condemned it.

Kreisky, in an intetview on Austrian Radio, said the talks in Vienna, which included a state dinner for the Palestine Liberation Organiztion leader, "served peace."

The Israeli parliament, by a vote of 82 to 5 with 3 abstentions, condemned "the reception given by Chancellor Kreisky to the leader of this organization of murders." Yesterday, Israel recalled its ambassador from Vienna to show its displeasure.

In the debate in parliamne today, Prime Miniter today, Prime Minister Menachem Begin sharply attacked Kreisky.

Describing the PLO covenant as a "document that seeks to destory Isreal," Begin said: "It says, among other things, that there is no connection between the land of Israel and the Jewish people. This is, perhaps, the paragraph that attracks Chancellor Kreisky to the PLO."

Kreisky told Austrian Radio that the talks he and former West German Chancellor Willy Brandt had with Arafat were "interesting and informative." He added that "there are many smart people in Israel who know exactly that what I am doing is not bad. . . . As to the wild ones, they are mad at me but I will be able to stand it."

Arafat flew to Tripoli last night for talks with Libyan leader Muammar Qaddafi.

Meanwhile, Begin and Egyptian President Anwar Sadat prepared to meet Tuesday in Alexandria, Egypt, for three days of talks.