Josef Mengele, a notorious Nazi death camp doctor and until now a naturalized citizen of Paraguay, still spends much of his time there, according to sources in the Israeli community here.

"He travels, visiting Brazil and other border countries and even Europe, so he could be away from Paraguay during a given week or month," said one Israeli source. "But "home" is Paraguay and he returns there after his travels."

That view is shared by Simon Wiesenthal of Vienna, who has spent a lifetime tracing Nazi fugitives documenting their whereabouts.

Interviewed by telephone by Ultima Hora, a newspaper in the Paraguayan capital of Asuncion, Wiesenthal said Mengele "lived and still lives in Paraguay."

Public interest in Mengele was reawakened not long ago when Wiesenthal disclosed that he had asked U.N. Secretary General Kurt Waldheim to try to persuade Paraguay to honor a longstanding request for Mengele's extradition to West Germany to stand trial.

Paraguayan authorities replied through Waldheim that Mengele, known as the "angel of death" for his genocidal activities at the Auschwitz concentration camp in Poland during World War Ii, no longer lived in that country.

They said Mengele had not lived there since 1960.

Tuesday, in an attempt to prove the point, Paraguayan Attorney General Clotildo Jimenez asked the nation's supreme court to annul Mengele's citizenship papers on the grounds that he had forfeited his rights by being outside the country for more than two years. On Wednesday, the court complied and annulled his citizenship.

But Israeli sources here have shrugged off Paraguay's assertion that Mengele no longer lives there as "the usual answer."

"They've been saying that for years - just like they used to say he'd never become a citizen," one spokesman said.

Not until an enterprising researcher in 1970 turned up a copy of the pertinent document, did Paraguayan authorities tacittly concede that Mengele had been a naturalized citizen since 1959.

But every inquiry, official or otherwise, on the fugitive's whereabouts yields a flat official denial that he is living in Paraguay.

A reporter from Argentina last month related: "I went for an appointment with a government information and before I could even open my mouth to ask a question, he said, "Mengele's not in Paraguay and we don't know where he his.""

In June, Miguel Angel Bestard, a Ministry of Interior official, told another journalist, "I deny categorically that Mengele is in Paraguay. It's absolutely false and a slander against this country."

American Ambassador Robert White told the same visitor, "I don't know whether Mengele is here or not, but if I were hunted the way he is, I'd go where I had some protection such as citizenship."

[Resolutions have been introduced in the U.S. House and Senate calling for an official request to Paraguay to facilitate extradition of Mengele if he is in Paraguay.]

Mengele clearly has been protected in Paraguay. His pursuers believe that one of the reasons he has been protected is that President Alfredo Stroesser, the country's strongman ruler since 1954, is the son of an immigrant German cavalry officer.

The nature and geography of the country also conspire to furnish protection. Its population of just 2 million is scattered over a land area almost as large as California. Even in the capital of Asuncion, with 400,000 population, a stranger making inquiries comes quickly to the attention of the neighbors - and the authorities.

The eastern third of the country between the Paraguay and Parana rivers is an area of green, rolling hills and some of the world's most fertile land for subtropical farming. It is the home of a majority of the 30,000 German nationals who live in Paraguay.

Mengele has been reported "positively sighted" in a village named Hohenau in the southeastern extreme of that region, and in the coffee-growing center of Pedro Juan Caballero, near its most northeasterly point.

Israeli sources here concede they do not know the exact location of his present refuge, but they believe it is somewhere between Hohenau and Pedro Juan Caballero, probably along the Parana River that forms parts of Paraguay's boundary with Brazil and Argentina and affords quick access into either of those countries.

Unlike many Nazi fugitives, Mengele made little effort to hide his identity during the early years after the war.

He lived openly in Bavaria until the early 1950s when he traveled to Argentina where the late Gen. Juan D. Peron had offered asylum to a host of Nazis on the run.

Mengele continued to live under his own name here until the mid-1960s, representing Karl Mengele & Sons, a Bavarian farm machinery firm managed by his brother. But he took the precaution of acquiring Paraguayan citizenship after a West German court issued a warrant for his arrest in July 1959.

Acting on the warrant, West Germany asked Argentina for his extradition, but the petition was returned without action in August 1959 on the technical ground that it should have been drafted in Spanish rather than German.

Official records in Paraguay show that "Jose Mengele" received an identity document from that country's authorities in October 1959. A month later, he received Paraguayan citizenship by order of the Supreme Court.

He continued to live in Argentina, however, until the spectacular 1960 abduction here of Adolf Eichmann by Israeli secret agents, who spirited Eichmann to Israel for trial and later execution for his key role in the Holocaust.

Israeli secret service chief Isser Harel, who personally directed the pursuit and capture of Eichmann in Argentina, wanted to seize Mengele, too, but was unable to divert the time and resources away from his principal mission.

In "The House on Garibaldi Street," his book on the Eichmann operation, Harel describes the home in Vicente Lopez, a middle-class suburb of Buenos Aires, where Mengele lived until just before the Eichmann capture.

"Of all the evil figures who played principal parts in the macabre drama of the attempt to wipe out the Jewish people," Harel wrote of Mengele, "he was conspicuous for his abominable enjoyment of his role as death's messenger."

After news of the Eichmann capture was made public, Argentina's press clamored for Mengele's arrest, and in July 1960, authorities ordered police to pick him up. But it was already far too late. Israeli agents traced him to a hotel in Asuncion and from there to Hohenau.

Mengele, 49 when he fled Argentina, is 68 today. In the years between, he is assumed to have changed his appearance, which once included blond hair and moustache. He is known to have used 11 false names in that time, with false documents to match. CAPTION: Map, By Dave Cook - The Washington Post